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Friday, March 29, 2024

Stock market drops; Shell down

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The stock market fell Friday as investors consolidated their portfolio ahead of a possible interest rate cut by the Bangko Sentral ng Pilipinas in next week’s meeting.

The Philippine Stock Exchange Index lost 40.21 points, or 0.5 percent, to 7,871.11 on a value turnover of P10.2 billion. Losers edged gainers, 94 to 91, with 62 issues unchanged.

ING Bank expects the central bank to extend its easing cycle with another 25-basis-point cut in policy rates to 4 percent next week, amid the continued deceleration in the country’s inflation rate.

Major property developer Ayala Land Inc. dropped 2.2 percent to P47,90, while 

sister unit Bank of the Philippine Islands, the third-biggest lender in terms of assets, also declined 2.2 percent to P91.10.

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Oil refiner Pilipinas Shell Petroleum Corp. shed 2.6 percent to P33.15, but JG Summit Holdings Inc. of industrialist John Gokongwei rose 3.9 percent to P75.30.

The rest of Asian markets, meanwhile, edged up Friday as investors turn their attention to the China-US trade talks, while keeping an eye on the Gulf region after last week’s air strikes on Saudi oil facilities fanned geopolitical tensions.

In afternoon trade Hong Kong was up slightly after a four-day sell-off, with investors on alert for further protests in the city following clashes between pro-democracy demonstrators and police last weekend. Shanghai ended up 0.2 percent and Tokyo closed 0.2 percent higher.

Mumbai soared more than five percent after the government said it would slash corporate taxes from 30 percent to 22 percent in an effort to boost the sagging economy.

Finance Minister Nirmala Sitharaman said the new rates would be “comparable with the lowest tax rates in South Asian region and in Southeast Asia.”

Sydney gained 0.2 percent as investors grow optimistic the Australian central bank will cut interest rates again at its next policy meeting, while Seoul rose 0.5 percent and Taipei added 0.3 percent. Singapore edged up 0.1 percent and Wellington put on 0.3 percent.

With a delegation from China in the US to prepare for higher-level negotiations next month, there are hopes the economic powerhouses can find a solution to their tariffs row that has dragged on the global economy for a year.

Stock markets have enjoyed a broadly positive September thanks to hopes for the talks, with both sides appearing to offer olive branches and sounding less confrontational than they did in July and August.

A shift by central banks to easier monetary policies—or a desire to do so—is providing some much-needed support to equities, though there was some disappointment in the Federal Reserve’s lack of forward guidance this week for further interest rate cuts.

Still, there is an expectation that more measures were likely on the way, with Kate Warne, investment strategist at Edward Jones, telling Bloomberg TV: “There’s a lot more monetary stimulus coming into the system.”

However, traders are on edge in case of further attacks on Saudi Arabia at the weekend following the devastating strikes that crippled two of its biggest oil plants on Saturday and sent the price of crude soaring. With AFP

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