Stocks retreated Tuesday as investors awaited fresh developments in the China-US trade talks and the market digested reports that Budget Secretary Benjamin Diokno was appointed the new governor of the Bangko Sentral ng Pilipinas.
The Philippine Stock Exchange index, the 30-company benchmark, lost 4 points, or 0.1 percent, to close at 7,670.62, as three of the six sub-sectors declined.
The broader all-share index fell 8 points, or 0.2 percent, to settle at 4,740.90, on a value turnover of P6.6 billion. Losers outnumbered gainers, 115 to 89, while 46 issues were unchanged.
Eight of the 20 most active stocks ended in the green, led by PLDT Inc. which climbed 3.8 percent to P1,075.00 and Bloomberry Resorts Corp. which gained 2.3 percent to P11.40.
Meanwhile, most Asian markets also traded lower Tuesday. Wall Street provided a negative lead as optimism that the world’s top two economies are heading for a tariffs deal was replaced by a need for clarity on any agreement.
Shares have enjoyed a blockbuster start to the year so far but “trade optimism could only take the stock market so far,” said Oanda senior market analyst Alfonso Esparza.
“High-level talks between the two largest economies have been ongoing and although they appear close to bearing fruit, the fact remains that the optimism has already been priced in,” he said. “Details on the agreement will be needed to unlock gains.”
Tokyo ended 0.4 percent lower, Sydney eased 0.3 percent, Singapore and Seoul were each 0.5 percent off and Taipei dropped 0.4 percent. Manila and Bangkok were also down.
But Shanghai jumped 0.9 percent while Hong Kong edged 0.1 percent higher after China announced hundreds of billions of dollars worth of tax cuts for firms to stimulate the economy.
Beijing will also increase spending, with the targeted fiscal deficit set to increase to 2.8 percent of GDP, from 2.6 percent last year, while the National People’s Congress is expected to pass laws next week regulating foreign investment, in a move that could help ease US trade tensions.
However, it did reveal a target of 6 percent to 6.5 percent growth for this year, below the last year’s final 6.6 percent, which was the slowest for three decades, as the leadership struggles to address a mounting debt crisis as well as the trade row.
In a speech at the open of China’s annual rubber-stamp parliament, Premier Li Keqiang warned the country “will face a graver and more complicated environment as well as risks and challenges, foreseeable and otherwise, that are greater in number and size”.
“We must be fully prepared for a tough struggle.”
However, Tai Hui, Asia-Pacific chief market strategist at JP Morgan Asset Management, said the latest target indicated the leadership had learned from the past.
It “reflects top officials’ maturity in accepting that China needs to stabilize growth in a sustainable manner, instead of a rush of liquidity to the economy, as we saw in previous downturns,” he said.
“They need to strike a balance between boosting economic activity and not restart another debt-fuelled boom. It would be unrealistic to expect 2019 to be stronger than 2018 considering global headwinds and some structural challenges in the Chinese economy.” With AFP
Shares in Mumbai rose slightly while the rupee also made slight gains despite news that the US had canceled its preferential trade status, saying it had failed to allow required market access.
However, New Delhi said the impact on its exports to the world’s biggest economy would be limited. With AFP
