The stock market rose slightly Wednesday ahead of the release of the gross domestic product figures and the policy meeting of the Bangko Sentral ng Pilipinas today.
The Philippine Stock Exchange Index added 16.06 points, or 0.2 percent, to 7,926.69 on a value turnover of P7.1 billion. Losers overwhelmed gainers, 133 to 63, with 46 issues unchanged.
The inflation rate in April eased to a 16-month low of 3 percent from 3.3 percent in March, prompting economists to believe the Bangko Sentral may consider cutting the benchmark interest rates in the policy meeting.
JG Summit Holdings Inc. of industrialist John Gokongwei advanced 3.5 percent to P65.80, while BDO Unibank Inc., the biggest lender in terms of assets, climbed 2.9 percent to P139.90.
Cemex Holdings Philippines Inc., a major cement producer, fell 4.4 percent to P2.36 on profit-taking, while casino operator Bloomberry Resorts Corp. declined 3.8 percent to P11.70.
A red wave, meanwhile, swept across Asia trading floors Wednesday as investors grew increasingly concerned that the China-US trade deal, which appeared all but ready to sign, could fall through.
After months of healthy gains across markets this year, Donald Trump’s threat to hike tariffs on $200 billion of Chinese imports from Friday caused shockwaves and rekindled the specter of a trade war between the planet’s two biggest economies.
And while Beijing insisted it would still send its top negotiator to planned talks in the US on Thursday and Friday, observers said confidence has been shattered, with uncertainty reigning ahead of the high-stakes meeting.
“The two largest economic powerhouses, the US and China, either will be at a trade war or a trade peace and in reality there’s only a couple of people who know the answer to that and it isn’t those of us on Wall Street,” said Larry Robbins, CEO of Glenview Capital Management.
“It’s to be expected that there’s some volatility into this critical week,” he told Bloomberg TV.
Asian markets staged a minor recovery Tuesday following the previous day’s pummeling, which came in response to Trump’s warning. But a blowout on Wall Street continued in Asia, with investors running for the hills.
Shanghai and Hong Kong each tanked more than one percent, with investors also spooked by weaker-than-forecast export data out of Beijing that highlighted the impact of the trade war on China and the global economy.
Tokyo shed 1.5 percent by the close while Sydney and Seoul each fell 0.4 percent. Singapore dropped one percent.
Taipei, Bangkok, Mumbai and Jakarta also sank.
However, a first New Zealand interest rate cut since late 2016″•and a signal of further reductions”•helped Wellington reverse course to end 0.4 percent higher.
And Stephen Innes at SPI Asset Management warned there could be worse to come.
“With the possibility of the trade deal in tatters, markets could turn upside down,” he said in a note.
“Indeed, the relentless bull market seemed impervious to risk, but (that) spawned a high degree of complacency that leaves most market participants ill-prepared for the inevitable reversal.” With AFP