Stock market slumps; ISM jumps

The stock market plunged Wednesday after investors took profits on recent gains and concerns monetary authorities may decide to raise interest rates again.

The Philippine Stock Exchange Index tumbled 146.18 points, or 2 percent, to 7,033.93 on a value turnover of P46.5 billion. Losers routed gainers, 165 to 38, with 41 issues unchanged.

A block sale involving secondary shares of San Miguel Food and Beverage Inc. worth P39.1 billion was crossed Wednesday and boosted the market value turnover.

PLDT Inc., the biggest telecommunications company, fell 5.6 percent to P1,321, while SM Investments Corp.of retail tycoon Henry Sy Sr. dropped 4.4 percent to P880. 

Conglomerate Ayala Corp. declined 2.1 percent to P920. But ISM Communications Corp. of businessman Dennis Uy jumped 35 percent to P5.55 after his group and China Telecommunications Corp. emerged the lone bidder for the new major telecommunications player. Philippine Telegraph and Telephone Corp. and the consortium of politician Chavit Singson’s LCS Group and TierOne were disqualified because of incomplete documents.

Uy is transforming ISM as his listed holding company to be called Udenna Holdings Corp. through a share swap deal.

The rest of Asian markets fluctuated Wednesday after US midterm elections left the two houses of Congress split between Democrats and Republicans, paving the way for gridlock on Capitol Hill.

Hong Kong lost its earlier gains to sit barely moved in late afternoon trade, while Shanghai ended 0.7 percent down and Tokyo shed 0.3 percent.

Sydney added 0.4 percent, with Singapore 0.3 percent up. There were also gains in Taipei and Wellington but Seoul lost 0.5 percent while Bangkok and Jakarta were also down.

Donald Trump’s Republican party maintained its control of the Senate but the Democrats regained power in the House of Representatives, in line with forecasts.

But, while the vote saw Trump’s party lose overall power on Capitol Hill, analysts pointed out that the result is unlikely to lead to a reversal of the White House’s popular tax cuts and deregulation.

Nor will it wind in the president’s aggressive efforts to reframe international trade, which has been a key to recent volatility in global markets.

“Equities remain supported, suggesting this outcome is positive for risk since the gridlock outcome ultimately will support the president’s mandate and a higher probability of more fiscal stimulus,” said Stephen Innes, head of Asia-Pacific trading at OANDA.

“Realistically I can’t see how the Democrats would want to be perceived as killjoys and try to stifle any policy which is supporting the economy,” he added.

However, with control of the House, Democrats will likely look to prevent Trump from pushing through his most divisive measures―gumming up the legislative process―while also looking to boost oversight of the White House.

On currency markets, the dollar dipped against its major peers as well as higher-yielding and emerging market units, as a win for Republicans in both houses of Congress would likely have led to more tax cuts and regulatory measures. With AFP

Topics: stock market , Philippine Stock Exchange Index , San Miguel Food and Beverage Inc. , PLDT Inc. , ISM Communications Corp.
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