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Friday, March 29, 2024

Market declines; Premiere surges

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Stocks fell Tuesday,  as investors tracked a Wall Street sell-off fuelled by concerns over corporate profits.

The Philippine Stock Exchange index, the 30-company benchmark, shed 3 points, or less than 0.1 percent, to close at 8,050.82.

The broader all-share index ended flat at 4,856.72, on a value turnover of P8.2 billion.  Losers outnumbered gainers, 124 to 86, while 33 issues were unchanged.

Eleven of the 20 most active stocks ended in the green, led by Premiere Horizon Alliance Corp. which climbed 16.2 percent to P1.58. Cemex Holdings Philippines Inc. went up 6.7 percent to P2.54, while TransPacific Broadband Group International Inc. gained 4.3 percent to P0.485.

Meanwhile, most Asian markets also ended lower Tuesday as the charging of Chinese giant Huawei in the US cast a shadow over upcoming trade talks,

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A busy week across the globe got off to a nervous start Monday after industrial giant Caterpillar and chip company Nvidia projected worse-than-expected results for 2019, citing ongoing weakness in China.

The announcements from two of Wall Street’s big-hitters follow similar warnings from Apple and Samsung and sent shudders through trading floors.

“Caterpillar and Nvidia are not the first companies to blame China for their afflictions, but both companies are seen as industry bellwethers and their disappointing results provide further evidence that this time China’s slowdown is for real,” said Rodrigo Catril, senior markets strategist at Australia National Bank.

The warnings come as Beijing struggles to kickstart the world’s number two economy, which expanded last year at its slowest pace for almost three decades, with a mammoth debt mountain and the US trade war hampering efforts.

However, while the majority of Asian markets fell Tuesday they did pare their losses and some even edged into positive territory.

Hong Kong was down 0.3 percent in the afternoon and Shanghai shed 0.1 percent while Sydney fell 0.5 percent and Singapore gave up 0.3 percent.

Wellington, Taipei and Jakarta rose but Tokyo and Seoul closed with minor gains.

The main focus of attention this week is on the two-day meeting between China and US officials aimed at resolving the long-running trade war that has been a drag on equities.

Donald Trump will meet China’s top economy envoy Liu He during the talks, which start Wednesday, while US Treasury Secretary Steven Mnuchin said he expected “significant progress at these meetings”.

However, the negotiations will begin under a cloud after the US Justice Department announced criminal charges against Chinese telecom titan Huawei and two affiliates on a number of technology theft counts as well as fraud related to Iran sanctions violations.

The firm’s chief financial officer Meng Wanzhou, who has been held in Canada for weeks, was also charged and faces extradition to the US.

Huawei described the charges as “disappointing” and denied any guilt, while China’s foreign ministry hit out at the “political motivations and political manipulations behind the actions”.

While the US has played down the significance of the Huawei row with regard to the talks, it ratcheted up the pressure ahead of the meeting and comes just over a month before the end of a 90-day deadline set between Trump and Xi Jinping on reaching a trade deal.

But before they vote on the deal, they must decide whether or not to include a series of amendments, one of which would open the door for MPs to bring in legislation preventing Britain leaving the European Union without a deal on March 29.

It would force May to delay Brexit for nine months if her plan is not approved before February 26, and give lawmakers the ability to indefinitely extend the deadline.

The sterling has enjoyed healthy buying in recent weeks on expectations that a no-deal exit will be avoided. With AFP

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