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Thursday, March 28, 2024

Market retreats; Cemex declines

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Stocks slipped Monday as investors wait for catalysts that could extend the market’s latest run ahead of Thursday’s release of the gross domestic data in the fourth quarter of 2018.

The Philippine Stock Exchange Index lost 39.66 points, or 0.5 percent, to 8,007.46 on a value turnover of P5.7 billion. Losers beat gainers, 114 to 86, with  45 issues unchanged.

Cemex Holdings Philippines Inc. fell 3.6 percent to P2.40 on profit-taking, while Manila Electric Co., the biggest retailer of electricity, declined 1.7 percent to P362.80.

BDO Unibank Inc., the largest lender in terms of assets, slipped 1.5 percent to P130, but conglomerate San Miguel Corp. climbed 4.7 percent to P162.80.

The rest of Asian markets on Monday built on last week’s rally as investors cheered a report that China had offered to eliminate its massive trade surplus with the United States, while data showed Chinese economic growth hit forecasts in 2018.

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Regional equities picked up where they finished Friday after Bloomberg said Beijing had pledged to ramp up spending on US goods over the next five years.

While there was some skepticism over the offer, observers said it indicated that talks between the economic superpowers were heading in the right direction.

The news provided further support to shares, which were already being buoyed by hopes the two sides would be able to resolve the tariffs spat, which has hammered world markets for almost a year.

China’s top economics negotiator is due to visit Washington later this month for more talks as the end of a 90-day truce agreed between Donald Trump and Xi Jinping draws closer.

“For now markets are going ahead with the growing perception that there is a lot of willingness by both parties to make a deal,” said National Australia Bank senior strategist Rodrigo Catril.  

“But as the March 1st deadline approaches the market is also likely to demand more concrete evidence that a deal looks more likely than not.”

Shanghai closed 0.6 percent higher and Hong Kong rose 0.4 percent in the afternoon, while Tokyo ended 0.3 percent stronger.

Sydney rose 0.2 percent, Singapore added 0.4 percent and Taipei put on 0.5 percent with Wellington and Jakarta also up.

China released figures showing the economy expanded at the 6.6 percent clip expected in an AFP survey, but that represented its slowest pace since 1990, when it was hit by outrage over the Tiananmen Square crackdown a year earlier.

And in a sign of the battle Beijing faces in getting things back on track, October-December growth came in at 6.4 percent, the worst quarterly figure since the global financial crisis 10 years ago.

The data come as China struggles to address a chronic debt burden while at the same time fighting the damaging trade war with the US.

It also reinforces the need for officials to press on with stimulus measures, such as the tax cuts announced last week and moves to make it easier for banks to lend. With AFP

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