Stocks down; Bloomberry, ALI fall

The stock market fell Monday along with the rest of Asia, after the US assassination last week of a top Iranian general fanned fears of a major conflict in the Middle East.

The Philippine Stock Exchange Index dropped 41.92 points, or 0.5 percent, to 7,797.87 on a value turnover of P4.1 billion. Losers beat gainers, 114 to 80, with 45 issues unchanged.

Casino operator Bloomberry Resorts Corp. shed 3.2 percent to P10.22, while major property developer Ayala Land Inc. declined 1.3 percent to P44.15.

Manila Water Co. Inc., however, rallied 4.1 percent to P9.60, while DMCI Holdings Inc. rose 3.7 percent to P6.69.

Oil prices, meanwhile, surged, gold hit a more than six-year high and most equities tumbled Monday.

Donald Trump warned of a “major retaliation” against Tehran after it threatened revenge for the killing Friday of commander Qasem Soleimani, which shocked world markets and sparked a sell-off in stocks and a spike in crude.

Iran announced on Sunday a further rollback of its commitments to its nuclear accord, while Iraq’s parliament demanded the departure of US troops from the country as fallout from the attack spread.

The crisis has jolted investors, who had been in an upbeat mood as China and the US prepare to sign their mini trade deal next week, while data indicates a slight improvement in the global economy.

The losses on equity markets extended into Asia, with Tokyo down almost two percent as dealers returned for the first time since the new year break. Hong Kong lost 0.8 percent.

Singapore fell 0.7 percent, Seoul shed one percent, Taipei and Mumbai each lost more than one percent and Jakarta slipped 0.7 percent.

Shanghai ended flat as investors cheered a pledge by authorities at the weekend to support China’s troubled banking sector and small businesses in the face of a growing debt mountain.

Both main crude contracts rallied in Asian trade, with Brent above $70 for the first time since September when attacks on two Saudi Arabian facilities briefly halved output by the world’s top producer.

While facing criticism for the action and calls to dial down the tension, the US president was in combative mood, saying the White House had dozens of sites lined up for strikes in case of retaliation by Iran—adding that he did not need Congressional approval, even for a “disproportionate” hit.

“Geopolitical tensions look like remaining elevated in coming days, so lending support to oil prices and keeping risk asset markets on the defensive,” said Ray Attrill at National Australia Bank.

Safe-haven assets popular in times of turmoil were also on the rise, with gold at highs not seen since mid-2013, while the Japanese yen was at a three-month high against the dollar.

“The nasty wake-up calls that no one wanted to start the year has roused the global stock market as investors had assumed smooth sailing after the phase one trade deal was announced,” said AxiTrader’s Stephen Innes. “Now they’re scrambling to seek out safe harbors.”

Equity markets tracked losses on Wall Street, where the three main indexes fell from record highs, while all seven bourses in the Gulf Cooperation Council (GCC) states finished sharply down, with some fearing Iranian revenge attacks on US assets or troops. With AFP

Some of the GCC members, including Kuwait, Qatar, and Bahrain, are home to major US military bases, while there are also hundreds of troops in Saudi Arabia. With AFP

Topics: Philippine Stock Exchange Index , Bloomberry Resorts Corp. , Ayala Land Inc. , Qasem Soleimani
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