The stock market fell for the fourth straight day Friday on rising China-US tensions, while a worse-than-forecast US jobs report and stalled stimulus talks in Washington fueled fears about the economic recovery.
The Philippine Stock Exchange Index slipped 25.75 points, or 0.4 percent, to 6,003.26, capping its losses on last-minute buying by investors. Value turnover was thin at P2.9 billion. Losers edged gainers, 93 to 91, with 46 issues unchanged.
ABS-CBN Corp., the broadcasting company of the Lopez Group, plunged 26.2 percent to P7.64, but MerryMart Consumer Corp., the newly-listed supermarket chain owned by businessman Edgar Sia II, rallied 7.3 percent P2.35.
Nickel Asia Corp., the biggest nickel ore miner, advanced 4.6 percent to P2.25, while Universal Robina Corp., the largest snack food maker, rose 1.9 percent to P122.
The rest of Asian equities took a beating Friday.
The losses come at the end of another tough week for markets, which have shown signs of stuttering after a months-long rally from their March trough.
Shanghai and Hong Kong led the sell-off Friday as relations between the world’s two superpowers took another bad turn when China ordered the closure of the US consulate in Chengdu in retaliation for America shuttering Beijing’s diplomatic mission in Houston this week.
The Dow and S&P 500 both lost more than one percent and the Nasdaq, which has been hitting regular records of late, dropped more than two percent.
And Asia took up the baton, with Hong Kong tumbling 2.2 percent and Shanghai losing 3.9 percent, while Sydney, Singapore, Jakarta and Bangkok retreated more than one percent.
Mumbai eased 0.6 percent and Seoul was 0.7 percent off, while there were also losses in Taipei and Wellington.
The standoff is the latest in a string of issues—including Hong Kong, coronavirus and Huawei—that have plunged relations between the superpowers into crisis.
On Thursday, Secretary of State Mike Pompeo ramped up his rhetoric, calling on “free nations” to triumph over the threat of what he said was a “new tyranny” from China, and said President Xi Jinping was a “true believer” in the “bankrupt” totalitarian Marxist-Leninist ideology.
But, while the move spooked investors, former Chinese diplomat Wang Yiwei said it was not as bad as it could have been. AFP
“It’s not possible to carry out an entirely equivalent action, but choosing Chengdu shows China wants to reduce the harm made to bilateral relations,” he told Bloomberg News. “The operations out of Chengdu are not the most high-profile of the US mission in China, compared to say Shanghai.”
Markets were already in the red following a steep drop on Wall Street sparked by news that 1.4 million Americans applied for jobless benefits last week, the first week-on-week rise since the start of the crisis.
The figures came as several states around the country were forced to reimpose containment measures soon after reopening from lockdown, forcing some to close bars, restaurants and other businesses key to the economy.
The reversion to such measures has come as a big blow to investors who had grown optimistic that the US economy was rebounding sharply from the collapse seen earlier in the year. With AFP