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Thursday, February 29, 2024

Stock market slips on Syrian crisis

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Stocks declined further Monday along with most Asian markets, after a US-led strike on Syrian targets fueled fresh concerns over the tinderbox Middle East, though analysts said investors were hopeful the crisis would not escalate.

The Philippine Stock Exchange Index fell 29.73 points, or 0.4 percent, to 7,870.25 on a value turnover of P4.8 billion. Losers overwhelmed gainers, 130 to 68, with 49 issues unchanged.

Conglomerate Metro Pacific investments Corp. slumped 4.1 percent to P4.73, while 

Wilcon Depot Inc., a major retailer of construction materials, lost 3.2 percent to P10.90.

Ayala Corp., which is into banking, telecommunications, property development, shopping malls and water distribution, slipped 1 percent to P946, while Universal Robina Corp., the biggest snack food maker, dropped 1.4 percent to P143.

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The US, Britain and France carried out attacks at the weekend on alleged chemical weapons facilities, in response to what they say was a toxic gas attack by the Russia-backed Assad regime a week before.

While there was broad support for the mission, Moscow condemned it as illegal and warned it would provoke “chaos” in international relations.

“The markets are taking the surgical strike at the heart of Syria’s chemical weapon program in their stride as traders had priced in this outcome with a high degree of probability,” Stephen Innes, head of Asia-Pacific trade at OANDA, said in a note.

The Syria crisis, which has seen the West’s relationship with Russia grow increasingly frosty, has encompassed other regional players including Iran, Saudi Arabia and Israel, and led to talk of a military standoff.

It also comes against the backdrop of a trade dispute between the United States and China. Many fear this could hammer the global economy if the two sides push through threatened tit-for-tat tariffs on billions of dollars’ worth of goods.

Most markets were down on Monday but the losses were limited.

Hong Kong fell 1.7 percent in the afternoon, while Shanghai had slipped 1.5 percent at the close, with traders there awaiting the release Tuesday of first-quarter Chinese growth data.

Singapore fell 0.2 percent, while Wellington and Taipei also declined.

However, Tokyo ended in positive territory, up 0.3 percent, while Sydney edged up 0.2 percent and Seoul 0.1 percent.

Property firms in Hong Kong took a hit on fears of an end to the era of low interest rates as the city’s de facto central bank is forced to support the local dollar, which is at the lowest end of its band with the greenback.

The Hong Kong Monetary Authority has spent more than US$1 billion boosting the currency, which has been hit by a flow of cash out of the city to the United States in search of higher interest rates.

Chang Liu, China economist at Capital Economics, warned there was a concern that the HKMA’s move would raise interest rates in the city, which could hammer the property market—among the world’s most expensive—and have a knock-on effect for the economy. With AFP

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