Stocks rallied Wednesday, powered by select blue chips recently battered by the recent market slump.
The Philippine Stock Exchange Index jumped 100.44 points, or 1.4 percent,to 7,333.73 on a value turnover of P5.2 billion. Gainers beat losers, 101 to 91, with 41 issues unchanged.
Bank of the Philippine Islands, the third-biggest lender in terms of assets, advanced 3.4 percent to P94.10, while sister unit Ayala Land Inc. rose 2 percent to P37.30.
SM Investments Corp. of retail tycoon Henry Sy climbed 4.2 percent to P916.50, while PLDT Inc., the largest telecommunications firm, gained 2.8 percent to P1,360
The uneasy calm that had descended on Asian markets, meanwhile, was shattered Wednesday after the US threatened to hammer China with tariffs on a further $200 billion of imports, ratcheting up a trade war between the world’s top two economies.
The news sent risk assets into a nosedive. Tokyo’s Nikkei ended 1.2 percent lower, with exporters hurt as the safe-haven yen climbed against the dollar.
Hong Kong lost 1.3 percent and Shanghai ended off 1.8 percent, while Seoul shed 0.6 percent and Singapore gave away 0.9 percent. Sydney retreated 0.7 percent, while Taipei and Jakarta were also sharply lower.
Washington’s announcement comes just days after the two sides exchanged tit-for-tat measures on a range of goods worth tens of billions of dollars, with US Trade Representative Robert Lighthizer blaming Beijing.
“As a result of China’s retaliation (to Friday’s measures) and failure to change its practices, the president has ordered USTR to begin the process of imposing tariffs of 10 percent on an additional $200 billion of Chinese imports,” he said in a statement.
China said it was “shocked” and warned it would impose countermeasures “to safeguard the core interests of the country and the fundamental interests of the people.”
Tuesday’s announcement is the latest move by Donald Trump in his America First protectionist agenda that has also seen the US target Canada, the European Union, and Mexico, who have also hit back with their own measures, sparking global trade war fears.
Trump has previously warned he would hit a total of $450 billion in Chinese goods, which essentially accounts for all the country’s US-bound exports, citing its unfair practices and intellectual property theft.
While observers have been nervously expecting the next salvo in the trade row, the news jarred markets, which had enjoyed some stability this week from upbeat US jobs data and hopes for the upcoming earnings season.
“This latest story will serve as a reality check for the market, reminding investors to reconsider how aggressive they want to be,” Michael O’Rourke, chief market strategist at JonesTrading, told Bloomberg News. “Regardless, the $200 billion in potential additional tariffs is not a surprise. The president made everyone well aware of them.”
Stephen Innes, head of Asia-Pacific trade at OANDA, said “nothing is written in stone and the tariffs are not set to take effect until September” but the move was still “a very sobering reality check as to just how fragile sentiment around trade war rhetoric is.” With AFP