Stocks up slightly; Jollibee rallies

The stock market rose slightly Tuesday on mild bargain-hunting, with gains capped by losses on select blue chip issues.

The Philippine Stock Exchange Index added 8.56 points, or 0.1 percent, to 7,059.38 on a value turnover of nearly P4 billion. Losers, however, beat gainers, 103 to 75, with 53 issues unchanged.

Jollibee Foods Corp., the biggest fast-food chain, rallied 3.9 percent to P252.40, while Now Corp., which is bidding to become the third major telecommunications company, climbed 3 percent to P7.49.

But Globe Telecom Inc., the second-largest telecommunications firm, slumped 5.2 percent to P2,210, while Security Bank Corp., the sixth-largest lender in terms of assets, fell 3.4 percent to P139.80.

The sell-off in the rest of Asian markets, meanwhile, slowed on Tuesday, with most markets seeing little movement as ongoing US-China tensions simmer.

After the biggest sell-off in three months on Monday, Shanghai’s stock market—which led the retreat following a week-long public holiday—was largely flat through Tuesday, finally closing up by 0.2 percent.

“If the trade confrontation continues, the Chinese currency will go lower and that will create a whole host of problems for the global economy,” Alicia Levine, chief strategist at BNY Investment Management, told Bloomberg News.

Stocks edged up in Hong Kong too, rising by a modest 0.2 percent through the afternoon.

“The relative calm in today’s Asia session belies the eerie sense of foreboding that continues to hang over equity markets,” said Innes.

But markets slumped in Tokyo for a fourth consecutive session, falling 1.3 percent as traders returned from a long weekend, with stocks dragged down by a higher yen, worries over China, and a trading system glitch which affected part of the trading day.

A testy public interaction between Chinese Foreign Minister Wang Yi and US Secretary of State Mike Pompeo in Beijing on Monday refueled market worries about China-US relations, which have taken a hefty knock from tit-for-tat tariffs.

“A possible train wreck on the negotiation front could completely derail global markets,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

“We should not underestimate the potentially destabilizing effect... a weaker yuan will have on regional markets, if not global markets.”

Adding to economic uncertainty on Tuesday was a bearish report from the International Monetary Fund, which lowered its forecast for Chinese economic growth in 2019 and warned that escalating trade tensions would drag on the world’s second-largest economy.

The IMF’s World Economic Outlook predicted China’s economy would grow 6.2 percent next year, down from an previous forecast of 6.4 percent.

Both of those figures would mark the slowest rate of expansion for China since 1990.

Toyota, which announced a massive recall of its hybrid cars on Friday, plunged three percent.

In early European trade, London rose 0.2 percent, while Paris fell 1.1 percent and Frankfurt slipped by 1.4 percent. With AFP

Topics: Stock Market , Philippine Stock Exchange , PSE , Philippine Stock Exchange Index , PSEi , Jollibee
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