Stocks fell for a second day amid thin trading, as investors stayed on the sidelines while authorities continued to assess the extent of damage left by Typhoon Ompong over the weekend and its impact on consumer prices.
The Philippine Stock Exchange index, the 30-company benchmark, shed 65 points, or 0.9 percent, to close at 7,221.23 Wednesday, with all six sub-sectors ending in the red.
The broader all-share index declined 34 points, or 0.8 percent, to settle at 4,454.71, on a value turnover of P5.5 billion. Losers outnumbered gainers, 153 to 36, while 41 issues were unchanged.
Two of the 20 most actives stocks ended in the green, led by SM Prime Holdings Inc. which gained 1.2 percent to P36.95. Universal Robina Corp. rose 0.8 percent to P144.10.
Meanwhile, Asian markets rose Wednesday as new tit-for-tat tariffs by China and the United States were seen lighter than feared, while there are hopes the two sides will eventually avert a damaging trade war.
Donald Trump on Monday said he would press ahead with 10-percent levies on another $200 billion of imports, prompting Beijing to target $60 billion of US goods with five to 10 percent taxes.
The developments were a clear escalation in the months-long standoff between the world’s top economies. But analysts said dealers had been expecting the measures and essentially took the lower rates as a positive sign.
Wall Street’s three main indexes rallied and Asia picked up the baton.
Tokyo rose 1.1 percent, with a shift out of the safe-haven yen supporting Japanese exporters, while Hong Kong was up 1.3 percent in the afternoon and Shanghai ended up 1.1 percent.
Sydney rose 0.5 percent, Singapore was up one percent and Taipei increased 0.9 percent. Wellington, Bangkok, and Jakarta also posted strong gains but Seoul was flat.
“The bottom line why the market didn’t react negatively was the lack of shock and awe given the tariffs were so well telegraphed,” said Stephen Innes, head of Asia-Pacific trade at Oanda.
Dealers are now keeping eyeing possible talks between Washington and Beijing after US Treasury Secretary Steven Mnuchin sent an invite to avert a trade war, which many fear could destabilise the world economy.
“It’s more likely that there will be some negotiated resolution coming through in the near term,” George Schultze, founder, and CEO of Schultze Asset Management in New York told Bloomberg TV.
“Cooler heads will eventually prevail because otherwise, both sides are shooting themselves in the foot,” Schultze said.
Chinese Premier Li Keqiang on Wednesday hit out at “unilateralism” during a speech at the summer session of the World Economic Forum.
He told delegates problems must be worked out through consultations, adding: “It is essential that we uphold the basic principles of multilateralism and free trade.”
Li also denied accusations China was allowing its yuan currency to weaken to offset the effects of Trump’s tariffs, saying “there is no evidence”.
Despite the calm on markets, Innes warned of the likelihood of further upheaval.
“Despite the market taking the bluster in stride, history tells us that tariffs are detrimental for global trade and commerce,” he said. “As such the current levels of market buoyancy belie the possible groundswell that could overrun markets.”
On oil markets, both main contracts were flat after rallying more than one percent Tuesday on the back of comments from OPEC kingpin Saudi Arabia that it is happy with prices rising above $80 a barrel. With AFP