Stocks plummeted to a one-year low Thursday, following a sell-off in New York as investors keep an eye on top-level talks between China and the United States on trade.
The Philippine Stock Exchange index, the 30-company benchmark, lost 200 points, or 2.6 percent, to close at 7,535.10, the lowest in more than a year, or since it settled at 7,522.98 on April 19, 2017. It marked the equity market’s single-day loss this year and widened the bellwether’s total losses to 12 percent since January.
The heavier index, representing all shares, also tumbled 96 points, or 2.1 percent, to settle at 4,602.48, on a value turnover of P7.2 billion. Losers outnumbered gainers, 128 to 50, while 52 issues were unchanged.
Nineteen of the 20 most active stocks ended in the red, with only GT Capital Holdings Inc. avoiding a drop. Conglomerates SM Investments Corp. and Metro Pacific Investment Corp. led losers Thursday.
Most Asian markets struggled Thursday as the tariff spat between the world’s two biggest economies returns to the fore. A US delegation—including Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross sat with Chinese officials in Beijing, with both sides tempering expectations of a quick resolution.
Trading floors have been swamped with worry since US President Donald Trump began this year threatening a series of tariffs on billions of dollars worth of goods, with an emphasis on China, which he claims is gaining an unfair trade advantage over the US.
Both sides were tempering expectations for the gathering with Hua Chunying, a spokeswoman for China’s foreign ministry, telling reporters it was “not realistic to resolve all issues through only one round of negotiations”.
While China has announced tit-for-tat moves, it has also unveiled a series of measures placating the White House but there are still worries the two sides could spiral into a potentially damaging trade war.
“When you think about the things that have been weighing on the market… I think the one that is really weighing the most heavily is trade and that’s why the market tends to swing the most violently on every new piece of news,” Michael Jones, chairman of RiverFront Investment Group, told Bloomberg TV.
Fresh upheaval in Washington added to the uncertainty on Wall Street as it emerged Trump’s attorney Ty Cobb on Wednesday became the latest lawyer to quit his legal team as a probe into the presidential campaign’s contacts with Russia presses on.
All three main indexes in New York ended down, despite another positive round of earnings reports including from Apple.
And the losses filtered through to Asia, where Hong Kong fell 1.4 percent, Singapore shed 1.5 percent and Seoul eased 0.7 percent. Taipei was one percent off, while Bangkok and Jakarta also retreated.
However, Shanghai ended up 0.6 percent and Sydney added 0.8 percent while Wellington put on 0.6 percent.
The dollar dialed back slightly after rallying Wednesday on the back of expectations the Federal Reserve will lift interest rates at least twice more this year. But the greenback is still around three-month highs against the yen and near four-year highs against the pound.
The central bank acknowledged an uptick in inflation while continuing to pledge further gradual increases in borrowing costs as the economy ticks along.
The positive outlook comes as other central banks—particularly the Bank of England and European Central Bank—rethink their plans for monetary tightening.
“With the US economic data flow continuing to dwarf other economies around the world and mainly the European Union, the dollar remains the markets’ darling for the time being,” said Stephen Innes, head of Asia-Pacific trade at Oanda. With AFP