Stocks fell for a second day amid thin trading, as investors remained nervous over the US-China trade talks with less than a week until Washington is due to impose fresh tariffs on Chinese goods.
The Philippine Stock Exchange index, the 30-company benchmark, shed 43 points, or 0.6 percent, to close at 7,736.18 on Tuesday. Despite the loss, the bellwether was still up 3.6 percent since the start of the year.
The broader all-share index also went down by 27 points, or 0.6 percent, to settle at 4,610.01 on a value turnover of P3.87 billion.
Losers outnumbered gainers, 139 to 55, while 44 issues were unchanged.
Six of the 20 most active stocks ended in the green, led by Metro Pacific Investments Corp. which climbed 3.7 percent to P3.67 and Megaworld Corp. which gained 1.7 percent to P4.25. Ayala Land Inc. rose 1.2 percent to P45.25.
Meanwhile, most Asian markets also traded lower Tuesday amid lingering concerns over the US-China trade talks. The general consensus is that the two superpowers will eventually hammer out a partial pact as part of a wider agreement, which has fueled a global equity rally for weeks, though comments from both sides—both optimistic and downbeat—are keeping dealers on their toes.
While the week is chock-full of key events including the UK general election and central bank decisions in the US and Europe, observers say the China-US negotiations are the only game in town.
The key concern for now is that with the December 15 deadline approaching, Donald Trump still has not scrapped planned levies on $160 billion of Chinese goods, which many fear could derail the long-running talks.
“Given the market has bought into the December tariff delay in a big way, all hell could break loose if the tariffs don’t get postponed,” said Stephen Innes at AxiTrader.
“Indeed, that would be a bitter pill for investors to swallow as the reality sets in that they have yet again been taken down the trade talk garden path only to end up at the cliff edge.”
Still, agriculture secretary Sonny Perdue provided some hope to markets when he said he did not think the levies will be imposed, though analysts pointed out that while this is positive, the ultimate decision is in Trump’s hands.
Hong Kong and Singapore each slipped 0.1 percent in the afternoon and Tokyo ended 0.1 percent lower, while Sydney and Taipei both fell 0.3 percent.
Manila, Mumbai and Jakarta were also in negative territory but Shanghai gained 0.1 percent, while Seoul and Wellington were each 0.5 percent higher.
There was little early reaction to data showing Chinese consumer inflation picked up in November but not as much as expected, with surging pork prices the key reason owing to African swine fever, which has seen a vast culling of the country’s pig herd. However, the drop in factory prices eased, soothing concerns about future inflation rates.
Sterling remains well-supported going into the final straight of the UK national vote, with Prime Minister Boris Johnson tipped to win a clear majority that will help him drive through his Brexit deal.
“As we saw in the last three years, opinion polls don’t always get it right, but the consistent lead by Boris Johnson’s party has encouraged dealers to buy into the pound,” said David Madden, market analyst at CMC Markets UK. AFP
However, the PM’s lead has narrowed slightly in recent days, which is keeping traders on guard for a possible hung parliament and more uncertainty. With AFP