The stock market plunged Wednesday following a worse-than-expected reading on US factory activity that revived worries about the impact of the trade war on the global economy.
A list of potential public offerings this quarter is also sapping market’s liquidity, with investors taking a cautious tone before taking in positions, said SB Equities Inc.
The Philippine Stock Exchange Index slumped 129.18 points, or 1.7 percent, to 7,610.68 on a value turnover of P6.1 billion. Losers beat gainers, 110 to 80, with 46 issues unchanged.
BDO Unibank Inc., the biggest lender in terms of assets, fell 4.5 percent to P137, while International Container Terminal Services Inc. dropped 3.8 percent to P115.50.
Universal Robina Corp., the largest snack food maker, declined 3.3 percent to P145, while Manila Electric Co., the biggest retailer of electricity, lost 3.2 percent to P357.
The rest of Asian markets also sank Wednesday.
Adding to the selling pressure in Hong Kong were long-running concerns about the impact of increasingly violent pro-democracy protests in the city that saw a demonstrator shot and wounded by police on Tuesday.
Regional investors took their lead from Wall Street, where equities tanked in response to news that an index of US manufacturing activity fell last month to its lowest point since June 2009.
The data pointed to the impact of the China-US trade war on the world’s top economy and will likely put pressure on Donald Trump to push through an agreement. Top level talks are planned for this month.
Manufacturing is “thought to be the specific chunk of the economy the president must… protect and the sector the US aggressive trade policies were supposed to enhance”, said Stephen Innes, Asia-Pacific market analyst at AxiTrader.
“So, the data could also imply not only monetary policy infusion is on the way but could increase the odds of some type of trade war detente.”
The figures combined with a weak eurozone inflation reading and a contraction in Britain’s economy in the second quarter.
Tokyo ended 0.5 percent lower, Sydney fell 1.5 percent and Singapore lost 1.2 percent. Taipei, Wellington, Bangkok and Jakarta were also lower.
Seoul shed almost two percent after North Korea fired a missile into the sea just a day after Pyongyang said it would resume stalled nuclear talks this week.
“Looking at the broader picture, it is fair to say that the worldwide manufacturing sector is in trouble,” said David Madden, market analyst at CMC Markets. “The US-China trade spat is having a knock-on effect around the globe.”
Hong Kong fell—though it pared earlier steep losses -as investors returned from a public holiday to mark China’s National Day but which saw some of the worst violence in the city since protests began in June.
A teenager was shot in the chest by a policeman, fueling fears of a worsening of the unrest that has crippled the city’s economy.
Shanghai was closed for a holiday. With AFP
