The stock market slumped Wednesday, weighed down by a warning from the International Monetary Fund that the world economy faces a “precarious” 2020.
The Philippine Stock Exchange Index sank 89.97 points, or 1.1 percent, to 8,161.49 on a value turnover of P6.4 billion. Losers overwhelmed losers, 125 to 73, with 57 issues unchanged.
Global trade tensions, continued uncertainty and rising prospects for a no-deal Brexit are sapping the strength of the world economy, the IMF said Tuesday.
Trade conflicts are undercutting investment and weakening manufacturing, and the IMF urged countries to avoid using tariffs to resolve their differences.
In the quarterly update of its World Economic Outlook, the IMF trimmed the global forecast issued in April by 0.1 percentage point this year and next, with growth expected to hit 3.2 percent in 2019 and 3.5 percent in 2020.
Jollibee Foods Corp., the biggest fast-food chain, fell 8 percent to P251, after disclosing that it was acquiring The Coffee Bean & Tea Leaf, a specialty coffee and tea chain based in Los Angeles, California, for $350 million.
PLDT Inc., the largest telecommunications firm, declined 2.4 percent to P1,120, while BDO Unibank Inc., the biggest lender in terms of assets, lost 2.3 percent to P147.50.
Metropolitan Bank & Trust Co., the second-largest bank, slipped 1.4 percent to P75.
Most Asian markets, meanwhile, enjoyed another day of gains Wednesday, with support coming from more healthy earnings results and renewed hopes for a resolution of the China-US trade war.
Hong Kong gained 0.6 percent in the afternoon and Shanghai finished 0.8 percent higher, while Tokyo ended up 0.4 percent.
Sydney gained 0.8 percent and Singapore put on 0.1 percent while Bangkok was also higher.
But Taipei slipped 0.1 percent and Mumbai shed 0.6 percent.
Seoul was down 0.9 percent with market heavyweights Samsung and SK Hynix both sharply lower on worries about the impact of the simmering trade row with Japan that threatens to hit South Korea’s crucial tech industry.
The pound was barely moved after Tuesday’s brief rally in reaction to Boris Johnson’s election to replace Theresa May as British prime minister, with investors keen to see whether the leading Brexiter pushes ahead with a no-deal divorce from the European Union.
While Federal Reserve officials are blocked from speaking on policy ahead of a crucial meeting next week, their decision on how far to cut interest rates is the big question on trading floors.
However, investors are still keeping an eye on the corporate reporting season, which has been broadly positive.
The latest big-name firms to post positive results were Coca-Cola, toymaker Hasbro and Harley-Davidson, helping all three main indexes on Wall Street end with sharp gains.
Adding to the upbeat mood were reports that US President Donald Trump’s Trade Representative Robert Lighthizer will lead a delegation to China next week to resume trade talks.
The meeting would be the first head-to-head since negotiations were cut short in May by Trump’s surprise decision to hit China with more tariffs for what he called Beijing’s backsliding. With AFP
