The stock market retreated Wednesday after hefty losses in New York overnight owing to growing China-US tensions ahead of fresh trade talks.
The Philippine Stock Exchange Index dropped 75.47 points, or 1 percent, to 7,681.25 on a value turnover of P4.8 billion. Losers beat gainers, 114 to 60, with 58 issues unchanged.
International Container Terminal Services Inc., the biggest port operator, fell 2.5 percent to P116, while SM Investments Corp. of the Sy Group lost 1.9 percent to P987.50.
Metropolitan Bank & Trust Co., the largest lender in terms of assets, declined 1.9 percent to P66, but Alliance Global Group Inc. of tycoon Andrew Tan rose 2.8 percent to P10.90.
Asian markets, meanwhile, mostly fell while the pound remained beaten down by fears Britain is on the verge of crashing out of the EU.
The downbeat mood comes as investors fret over signs the global economy is slowing down, with the International Monetary Fund forecasting the weakest growth in a decade owing to long-running tariff disputes.
Days before high-level negotiations were due to resume, the US announced restrictions on 28 Chinese entities over human rights violations in Xinjiang province and imposed visa restrictions on some officials.
Then Bloomberg News reported unnamed Trump administration officials had said the White House was mulling new measures to curtail US investment in the country.
For its part, Beijing has hit out at the decisions and moved to take steps against the National Basketball Association in a brewing row over a team manager’s remarks on Hong Kong’s protest movement.
A report this week had already said China had narrowed the issues it was willing to discuss at the talks, with observers saying leaders felt in a stronger position as Donald Trump faces an impeachment inquiry at home and a weakening economy.
“It will be interesting to see how it plays out this week between the US and China,” Andrew Balls, at Pacific Investment Management, told Bloomberg News.
The flare-up comes “at a time when we already see growth pretty weak in the first half of next year and you have at least some evidence of weakness in manufacturing spilling into services.”
While economic data has been increasingly weak in recent months, hopes for this week’s talks have been providing some much-needed support. But the latest developments were a reminder that progress would likely be rocky.
All three main indexes on Wall Street sank and on Wednesday, Hong Kong fell 0.8 percent while Tokyo closed down 0.6 percent. Sydney was also off 0.7 percent, Singapore dropped 0.8 percent and Taipei lost more than one percent.
Wellington, Taipei and Jakarta were also in the red but Mumbai and Shanghai posted gains.
“The US tactics are undoubtedly a high risk, seeking to pressure the Chinese trade delegation before the main event really gets underway,” said Jeffrey Halley, OANDA senior market analyst for Asia-Pacific. “Financial markets certainly thought so, with Wall Street a sea of red. The very real danger is the whole process backfires.”
There was little support from comments by Federal Reserve boss Jerome Powell, who said the US economy would continue to expand but that trade wars and Brexit were causing headwinds. With AFP