Stocks declined Wednesday on profit taking, with investors looking for a new catalyst to sustain the recent market rally.
The Philippine Stock Exchange Index fell 31.20 points, or 0.4 percent, to 7,382.43 on a value turnover of P7.2 billion. Losers beat gainers, 95 to 81, with 54 issues unchanged.
Major property developer Ayala Land Inc. dropped 1.6 percent to P40.25, while Metropolitan Bank & Trust Co., the second-biggest lender in terms of assets, lost 1.4 percent to P75.85.
ISM Communications Corp., a member of the consortium declared by the government as the country’s third major telecommunications firm, slumped 16.4 percent to P5.23.
JG Summit Holdings Inc. of industrialist John Gokongwei bucked the market retreat, gaining 3.1 percent to P49.65.
Asian markets, meanwhile, mostly rose Wednesday on hopes for a positive outcome from Donald Trump’s high-stakes trade talks with Xi Jinping, while dovish comments from the Federal Reserve’s number-two suggested the bank could slow its pace of interest rate hikes.
Wall Street provided a positive lead following soothing comments from top White House economic advisor Larry Kudlow on the chances of a trade deal when the leaders of the world’s top two economies meet Saturday.
“The president said there’s a good possibility we can make a deal and he’s open to it but certain conditions have to be met, certain things have to be changed,” Kudlow told a White House briefing.
The remarks came a day after Trump warned that if he cannot reach a deal with Xi he expects to increase tariffs on $250 billion of Chinese goods and impose levies on all the other goods the US imports from the country.
Hong Kong jumped 1.3 percent in the afternoon and Shanghai closed 1.1 percent higher with Tokyo climbing one percent.
Singapore added 0.3 percent, Seoul was up 0.4 percent and Taipei rallied 1.1 percent, while Wellington, Mumbai and Bangkok were all higher. Sydney was marginally lower.
While observers do not expect a wide-ranging deal to be made at the meeting, which takes place on the sidelines of a G20 summit in Buenos Aires, there is the possibility of an agreement that will allow the two to reach a consensus down the line.
“It will depend a lot about the kind of comments that will come out after the meeting,” Massimiliano Bondurri, founder and chief executive officer of SGMC Capital in Singapore, told Bloomberg TV.
“We don’t expect anything saying a deal will never be found, we expect some formal comments will be made as in discussions will be ongoing, but we haven’t found any agreement as of yet, so that’s likely to weigh on the risk sentiment on global markets.”
However, Eli Lee, head of investment strategy at the Bank of Singapore, warned that failure to reach an agreement this weekend would spell trouble.
“Given that the markets are pricing in some likelihood of a ceasefire or resolution, a no-deal scenario will cause a negative knee-jerk reaction for risk assets,” he said in a report.
“The prospects of further trade escalation and disruptive second-order effects will exacerbate growth fears and drive further asset de-rating, particularly for Asian equities.” With AFP
