Stocks retreated Tuesday from a two-day advance, as Asian equities traded lower after US President Donald Trump’s national security adviser resigned.
The Philippine Stock Exchange index, the 30-company benchmark, slid 87 points, or 1.2 percent, to close at 7,206.84, as all six sectoral indices posted losses.
The heavier index, representing all shares, dropped 34 points, or 0.8 percent, to settle at 4,374.58, on a value turnover of P7.3 billion. Losers outnumbered gainers, 100 to 95, while 44 issues were unchanged.
Only six of the 20 most active stocks ended in the green, led by school operator STI Education Systems Holdings Inc. which jumped 9.9 percent to P1.22 and conglomerate LT Group Inc. of tycoon Lucio Tan which climbed 5.3 percent to P14.60. Philex Mining Corp. was the biggest loser, as it plunged 12.8 percent to P8.90.
Meanwhile, most Asian markets fell, as the disarray in the Trump administration overshadowed optimism for an improving US economy under the president’s policies that sent the S&P 500 Index to an unprecedented high on Monday.
Michael Flynn stepped down as national security adviser amid deepening controversy over allegations of improper contact with Russian officials, disrupting the global strategic team of a president propelled to office largely on promises to protect the US against foreign terrorism.
“The news dampens slightly the expectations for a smooth implementation of various policies,” said Minori Uchida, head of global market research at Bank of Tokyo-Mitsubishi UFJ. But he added the dollar selloff may be limited. “Market expectations on Trump are about his economic policies, and while Flynn’s post is significant, it isn’t directly related,” he said.
Analysts, however, said there was likely room for further gains as traders bet Trump will help fire up the US economy.
Shares around the world have resumed their Trump surge since the tycoon promised Thursday to unveil details of tax reform, while also softening his stance on key trade partners China and Japan.
While most markets across Asia were in the red on Tuesday, there was some support from data showing a surge in Chinese factory gate prices, indicating a further pick-up in the world’s number two economy.
Tokyo’s Nikkei index tumbled 1.1 percent on profit-taking and as the yen rebounded against the dollar.
Hong Kong was flat in the afternoon and Shanghai also barely moved as profit-taking overshadowed news that China’s producer price index hit 6.9 percent in January—its highest level since 2011. The PPI is closely watched as a guide to future consumer prices.
The consumer price index also improved, rising 2.5 percent.
There are hopes the rise in inflation will put upward pressure on prices around the world, fueling much-needed inflation to spur the global economy.
In other markets, Seoul slipped 0.2 percent and Sydney reversed morning gains to finish 0.1 percent off. Singapore shed 1.2 percent, while Jakarta and Bangkok also slipped.
The losses came despite another record close on Wall Street and healthy gains in Europe, where dealers cheered an upward revision of eurozone growth for this year and next.
However, Greg McKenna, chief market strategist at CFD and FX provider AxiTrader, said in a note that confidence was rising and dealers were putting “faith in Donald Trump’s ability to deliver and implement his transformative policies for the US economy.” With Bloomberg, AFP