Market declines; SMIC advances

Stocks fell for a second day, as investors expressed uneasiness over the lack of details from the US-China trade talks.

The Philippine Stock Exchange index, the 30-company benchmark, shed 63 points, or 0.8 percent, to close at 7,707.80 Tuesday.  Despite the loss, the bellwether was still up 3.2 percent since the start of the year.

The broader all-share index also dropped 27 points, or 0.6 percent, to settle at 4,626.36 on a value turnover of P21.1 billion.  Losers outnumbered gainers, 99 to 72, while 55 issues were unchanged.

Five of the 20 most active stocks ended in the green, led by SM Investments Corp. which rose 1.5 percent to P1,091.00 and PLDT Inc. which gained 1.3 percent to P1,108.00.

Meanwhile, other Asian markets also traded lower Tuesday.  While the mood remains upbeat across trading floors that a partial tariffs agreement between the US and China will eventually be signed, there is a sense of unease about the lack of detail from both sides.

Chinese Vice Premier Liu He spoke by phone to US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, state media said.

The two sides “discussed solving issues regarding each other’s core concerns, reached consensus on properly resolving related issues, and agreed to maintain communication on remaining issues in consultations on the ‘phase one’ deal,” China’s official Xinhua news agency said, without providing more details.

The news came after Beijing said at the weekend it would hike penalties on violations of intellectual property rights and also look at lowering the threshold for criminal punishments of those who steal IP.

The IP issue is a major sticking point for the United States in the discussions and agreement on it is seen as key to their success.

The signals from the two economic giants are growing increasingly positive and observers said there is a need for both sides to nail the partial deal, which is part of a wider agreement.

“There are more incentives now on both sides to get this trade deal done compared to when the trade talks first fell apart earlier this year because the Chinese economy has slowed down much more since then and in the US, Trump is facing his 2020 election campaign,” Amy Xie Patrick at Pendal Group told Bloomberg TV.

However, Asia struggled to extend its own advances from the day before. Hong Kong and Singapore each dropped 0.2 percent in the afternoon, Seoul fell 0.1 percent and Jakarta shed 0.3 percent.

However, Tokyo rose 0.4 percent as the trade optimism lifted the dollar against the yen, providing a boost to Japanese exporters, while Shanghai was flat.

Sydney and Wellington both climbed 0.8 percent, while there were also gains for Mumbai, Bangkok and Taipei.

“Optimism is rising that a phase one trade deal could be agreed before December 15 when new US tariffs are expected to kick in,” said Michael Hewson, chief market analyst at CMC Markets UK.

“However it seems much more likely that these could well be deferred once more, with an agreement more likely to occur sometime in the New Year, if we get one at all.”

He added: “The continued impasse remains a clear and present danger to the global economy.”

In Hong Kong, Chinese e-commerce titan Alibaba surged 7.7 percent as it began trading for the first time following an $11 billion initial public offering, which is the city’s biggest since 2010.

Asia’s most valuable firm, which is already traded in New York, said the decision to list in Hong Kong was a vote of confidence in the city, which has been hit by months of violent protests and the trade war. With AFP