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Stock market drops; Cemex rallies

The stock market slipped Friday in cautious trading, with investors treading carefully as global slowdown worries return to the fore.

The Philippine Stock Exchange Index fell 26.17 points, or 0.3 percent, to 7,868.28 on a value turnover of P5.7 billion. Losers beat gainers, 94 to 81, with 61 issues unchanged.

Conglomerate SM Investments Corp. of the Sy Group dropped 2 percent to P931, while major property developer Ayala Land Inc. also declined 2 percent to P48.50.

Cemex Holdings Philippines Inc. rallied 5.3 percent to P2 after net income surged 137 percent in the first quarter of the year to P172 million from P73 million year-on-year.

Bank of the Philippine Islands, the third-biggest lender in terms of assets, rose 2.4 percent to P83.45.

Asian markets, meanwhile mostly fell Friday, with analysts pointing to an economic divergence between the US and the rest of the world.

Shanghai dropped 1.2 percent, extending losses of more than two percent Thursday as investors fret that a run of market-supporting stimulus measures aimed at supporting the economy could be coming to an end.

Tokyo ended down 0.2 percent and Seoul shed 0.5 percent, while there were also losses in Taipei, Wellington and Bangkok. Singapore was flat.

But Hong Kong added 0.2 percent after suffering five straight days of decline, while Sydney, Mumbai and Singapore edged up.

Traders have been cheered by a string of better-than-expected earnings from corporate titans this reporting season, with Facebook, Microsoft and Amazon adding to the positive mood on Wall Street, but unable to fuel broad gains.

However, there have been a couple of misses from other top firms, while a series of downbeat data and central bank caution have dampened spirits.

Central banks in Japan, Sweden, Turkey, and Ukraine, with an eye on the global outlook, on Thursday, took a dovish turn and flagged softer policy in the near future. That came after a growth forecast cut by the Bank of Canada.

Meanwhile, low inflation has led to speculation the Reserve Bank of Australia could soon cut borrowing costs, while the European Central Bank is battling weak eurozone growth.

On top of that, a drop in German business confidence fanned worries about the bloc’s biggest economy, while South Korea saw its worst performance in 10 years during the first quarter.

But while the Federal Reserve has said it will not likely raise interest rates this year, the US economy continues to outpace its peers and the jobs market is flourishing, with Wall Street hitting new records this week. Eyes are now on the release of US growth data later Friday.

“While positive earning numbers have lent massive support to US equities, it’s hard to ignore the inescapable fact that we are back to the divergent economic narrative where the US economy is on fire while ice water continued to pour over the rest of the globe,” said Stephen Innes of SPI Asset Management.

There was little reaction to soothing comments from Xi Jinping on trade, a pledge to remove subsidies for Chinese firms and not keep the yuan artificially low. Top Chinese and US negotiators resume negotiations next week in Beijing aimed at ending their long-running trade war. With AFP

Topics: Philippine Stock Exchange Index , SM Investments Corp. , Ayala Land Inc.
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