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Thursday, March 28, 2024

Market retreats; Bloomberry climbs

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Stocks retreated Tuesday, as investors took profit ahead of the long holiday and following losses in regional markets amid increasing caution about geopolitical risks and the path of US interest rates.

The Philippine Stock Exchange index, the 30-company benchmark, shed 16 points, or 0.2 percent, to close at 7,601.40, as three of the six major sectors registered losses. Despite Tuesday’s drop, the bellwether was still up 11.1 percent this year.

The heavier index, representing all shares, also dropped 8 points, or 0.2 percent, to settle at 4,532.92, on a value turnover of P7.1 billion.  Losers outnumbered gainers, 118 to 87, while 47 issues were unchanged.

Ten of the 20 most active stocks ended in the green, led by casino operator Bloomberry Resorts corp. which climbed 4 percent to P8.69 and GT Capital Holdings Inc., the holding company of tycoon George Ty, which rose 3.6 percent to P1,269.  Developer Robinsons Land Corp. advanced 2.6 percent to P25.85.

Meanwhile, Chinese equities traded in Hong Kong fell to a one-month low while Japan’s Topix slipped as the yen gained. 

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Shares in Seoul extended the longest losing streak since June as tensions over both Syria and North Korea remain in focus. US bond yields added to declines after Federal Reserve Chair Janet Yellen confirmed that the central bank has shifted its focus to sustaining economic gains from post-crisis healing. Oil retreated after a five-day rally, its longest stretch this year.

Investors in Tokyo were nervous about rising geopolitical tensions, while Toshiba ended lower as it faced a looming deadline to publish its overdue earnings report.

North Korea on Tuesday denounced Washington’s deployment of a naval strike group to the Korean peninsula, warning it was ready for “war”.

The deployment came days after an American cruise missile strike on Syria that was widely interpreted as putting Pyongyang on warning over its refusal to abandon its nuclear ambitions.

“Given its location, many in Japan pay close attention to the North Korean situation,” said Toshihiko Matsuno, chief strategist at SMBC Friend Securities.

While stocks pared the initial plunge that met news of the US missile attack on a Syrian airbase, the brewing crisis is keeping dealers on edge heading into the company earnings season.

President Donald Trump’s administration has rankled Moscow by saying it sees no peace in civil war-hit Syria while Bashar al-Assad remains president, while Russia has described the strikes as inflicting “considerable damage” to already “lamentable” bilateral ties.

The US said the strike was in retaliation for a chemical attack on rebel forces that killed dozens.

US Secretary of State Rex Tillerson will visit Moscow this week to discuss the crisis with his counterpart Sergei Lavrov as members of the Group of Seven leading economies are meeting in Italy to hammer out a plan aimed at getting Russia to rein in Assad.

Trump, whose Syria strike was widely interpreted as a warning to North Korea, has asked advisors for a range of options to rein in Pyongyang.

On oil markets both main contracts built on the gains seen since Friday’s attack, which flamed speculation about the impact on exports from the crude-rich Middle East.

US benchmark West Texas Intermediate is up almost three percent since the strike while Brent has added more than two percent, with the closure of a Libyan oilfield also providing support. With Bloomberg, AFP

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