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Stocks fall; ICTSI, Jollibee gain

The stock market fell slightly Tuesday on profit-taking to end a three-day rally that pushed the benchmark index past 8,000 points Monday.

The Philippine Stock Exchange Index stayed above the psychological level despite  slipping 14.41 points, or 0.2 percent, to close at 8,030.98 on a value turnover of P7.8 billion. Gainers beat losers, 107 to 95, with 40 issues unchanged.

Megaworld Corp., the biggest lessor of offices spaces, declined 2.1 percent to P6 while SM Investments Corp. of the Sy Group lost 1.6 percent to P955.

International Container Terminal Services Inc., the largest port operator, climbed 2.9 percent to P144, while Jollibee Foods Corp., the largest fast-food chain, rose 1.8 percent to P285.

The rest of Asian markets extended the previous day’s gains in Asia on Tuesday, with investors turning their attention back to the China-US trade row and a planned meeting between the countries’ leaders later this month.

Shanghai led the gains, rallying 2.6 percent after a 0.9 percent rise Monday, while Hong Kong rose 0.8 percent, building on Monday’s more than two percent jump.

Tokyo ended 0.3 percent higher, Sydney climbed 1.6 percent and Singapore put on 0.7 percent while Seoul added 0.6 percent. Wellington was up more than one percent, with Taipei strengthening 0.4 percent.

Donald Trump’s decision to drop threatened tariffs on Mexico after a last-minute immigration deal last week sparked relief across trading floors and led to hope that the row with Beijing could also end with some sort of agreement.

The gains, which follow another healthy Wall Street performance, are much needed since the US president shocked markets last month by hiking levies on $200 billion of Chinese imports, blaming backsliding over their long-running trade talks.

Support is also coming from expectations the Federal Reserve will cut interest rates as soon as next month in response to a string of soft US economic data and concerns about the impact of the China stand-off.

“What continues to grease the wheels of US equity markets and the one constant that keeps the S&P (500) ticking is Federal Reserve free and cheap money, it’s long been an established pattern,” said Stephen Innes at Vanguard Markets.

But OANDA senior market analyst Edward Moya warned that while lower US central bank rates were a major boost, traders were ultimately keen to see the world’s top two economies resolve their trade war.

“The recent global stock market rally has stemmed from expectations that the Fed will come to the rescue with a couple of rate cuts this year,” he said in a note. “But that will not likely deliver fresh record highs with the US indexes unless we see a scaling back of tariffs between the US and China.”

Focus is now on the expected face-to-face between Trump and Chinese President Xi Jinping at the G20 in Osaka at the end of June.

The US president told CNBC on Monday that a meeting had been planned but warned that if Xi did not turn up he would ramp up levies on all Chinese imports. With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi , Jollibee
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