Stocks extended their slump for the third straight day Friday, dampened by MSCI’s announcement to raise the weighting of Chinese A shares in the MSCI Emerging Markets index from 5 percent last year to 20 percent that could trigger capital outflows from emerging markets like the Philippines.
The Philippine Stock exchange Index fell 63.72 points, or 0.8 percent, to a near-two-month low of 7,641.77 on a value turnover of P8.5 billion. Losers overwhelmed gainers, 144 to 64, with 60 issues unchanged.
BDO Unibank Inc., the biggest lender in terms of assets, dropped 3.1 percent to P123.70, while conglomerate Metro Pacific Investments Corp. lost 2.8 percent to P4.57.
GT Capital Holdings Inc. of the Ty Group declined 2.6 percent to P930, while International Container Terminal Services Inc., the largest port operator, also fell 2.6 percent to P113.
The rest of markets rose in Asia on Friday though investors remain cautious as they await developments after the failure of the Trump-Kim summit while also keeping an eye on the stand-off between India and Pakistan.
A better-than-expected reading on US economic growth lifted sentiment, while optimistic comments from a top White House economic advisor on the China-US trade talks also provided support.
The gains put the region on course for another strong week despite disappointment over the North Korea talks in Hanoi and renewed tensions in Kashmir.
Shanghai led gains, surging 1.8 percent and extending a rally that has seen it climb by about a fifth since the start of the year thanks to expectations over the trade talks.
Adding to the interest in mainland equities was news that index compiler MSCI will increase the weighting of Chinese-listed stocks in its benchmark indices and nearly double the number of companies included.
With those indices used by global funds for their investments, the move is expected to attract tens of billions of dollars more to the country’s markets.
Also Friday, a private gauge showed factory activity in ™™China improved last month and beat expectations, providing hopes for stability in the world’s number two economy.
Tokyo climbed one percent thanks to a weaker yen, while Hong Kong added 0.5 percent in the afternoon.
Sydney rose 0.4 percent, Singapore and Wellington each edged up 0.3 percent and Jakarta put on 0.9 percent. Taipei and Seoul were closed for public holidays.
Traders brushed off a negative lead from Wall Street that came after data showed the US economy grew in the fourth quarter at a much slower pace than the previous three months but was much better than forecasts.
US President Donald Trump’s chief economic adviser Larry Kudlow cheered markets after he told CNBC “progress has been terrific” and while he said there was still work to be done he thought the two sides were “headed toward a remarkable historic deal.”
The news soothed worries on trading floors after the US Trade Representative appeared to temper expectations for an agreement. With AFP