Share prices fell Friday on another bout of profit taking, with investors wary over the prospect of a global economic slowdown amid the rising trade tensions between the US and China.
The Philippine Stock Exchange Index declined 56.94 points, or 0.7 percent, to 7,747.09 on a value turnover of P7.4 billion. Losers outnumbered gainers, 125 to 73, with 44 issues unchanged.
Jollibee Foods Corp., the biggest fast-food chain, dropped 2.1 percent to P278, while ISM Communications Corp., a company owned by businessman Dennis Uy, lost 3.3 percent to P6.21.
LT Group Inc. of airline and tobacco tycoon Lucio Tan slumped 4.8 percent to P15.10, while Megawide Construction Corp. fell 2.3 percent to P21.50.
Meanwhile, the increasingly fractious trade row between China and the United States was the main focus of Asian investor angst Friday, with most markets down to extend the previous day’s steep losses, though oil edged back from a painful sell-off.
With little hope for a quick turnaround in the standoff the economic superpowers appear to be digging in their heels as they exchange barbs, blaming each other for the breakdown in tariff negotiations while the Huawei crisis shows no sign of letting up.
On top of that, investors have been spooked by weak economic data in Europe and the United States that reinforced concerns about a global slowdown, with the IMF warning the trade standoff will “jeopardize” 2019 growth.
“The trade war is going to cause growth to slow, both in the US and China, and therefore globally—there is no doubt about that,” Komal Sri-Kumar, founder of Sri-Kumar Global Strategies, told Bloomberg TV.
“The trade war is taking on new dimensions.”
Having taken a hammering on Thursday—with energy and tech firms among the worst hit–Asian markets continued to struggle Friday.
Tokyo closed 0.2 percent lower, Sydney lost 0.6 percent and Seoul fell 0.7 percent. Singapore and Wellington dipped 0.4 percent.
But Hong Kong rose 0.4 percent in the afternoon and Shanghai swung through the day to end marginally higher.
Mumbai climbed 0.9 percent, Taipei and Singapore each added 0.2 percent, and Jakarta and Bangkok both edged up slightly.
The tepid performance followed a sharp drop on Wall Street, where all three main indexes lost more than one percent. Investors were also spooked by an index of US manufacturing activity hitting a nine-year low in May and Germany posting weak factory figures.
And there are warnings about the outlook for equities as China and the United States continue to hit out at each other.
“China’s stance on the talks has been clear—if the US wants to resume talks, they should show sincerity and correct their wrong practices,” commerce ministry spokesman Gao Feng said Thursday.
Meanwhile US Secretary of State Mike Pompeo rejected Huawei’s statements about its relationship with China’s government and said any data touched by the company is “at risk” of falling into the wrong hands.
“To say that they don’t work with the Chinese government is a false statement,” he said. Huawei “is deeply tied not only to China but to the Chinese Communist Party.” With AFP