Market declines; JG Summit slips

Stocks retreated Monday in mixed trading, ignoring the rally in Wall Street overnight and reduced US-Iran tensions.

The Philippine Stock Exchange Index declined 20.87 points, or 0.3 percent, to 7,776.77 on a value turnover of P6.8 billion. Gainers, however, beat losers, 101 to 89, with 47 issues unchanged.

JG Summit Holdings Inc. of the Gokongwei Group fell 2.8 percent to P77.05, while unit Universal Robina Corp., the biggest snack food maker, also dropped 2.8 percent to P140.30.

Philippine Seven Corp., the local franchise holder of convenience store chain 7-Eleven, advanced 5.3 percent to P140, while electronics firm Cirtek Holdings Philippine Corp. rose 4 percent to P7.49.

Most Asian markets rose Friday but investors were struggling to maintain a rally triggered by easing US-Iran tensions the previous day as focus turned back to the global economic outlook.

The toning down of rhetoric from Donald Trump and Tehran following an Iranian missile attack on US assets in Iraq soothed concerns about a possible conflict in the Middle East and lit a fire under global equities on Thursday.

That has allowed dealers to resume their buying spree that had characterized business for the past few weeks, cheered by China and the United States reaching a trade deal, central banks easing monetary policy and data pointing to an improved global outlook.

“Even though we are hitting close to or near all-time highs, we still  feel  pretty excited about this market,” Invesco strategist Timothy Horsburgh told Bloomberg TV.

“What we’ve seen over the past couple of days with some of this relief rally, this is indicative of a market that’s wanted to go higher for a while now as a result of better fundamentals and a little bit of optimism around reaccelerating growth here in the US.”

Wall Street’s three main indexes racked up fresh records and Asia broadly followed suit, though the gains were light.

Tokyo ended 0.5 percent up, Seoul added 0.9 percent and Sydney jumped 0.8 percent, while Singapore put on 0.2 percent, Taipei jumped 0.5 percent and Mumbai climbed 0.7 percent. Wellington, Bangkok and Jakarta also rose.

But Shanghai dropped 0.1 percent.

There appeared to be little negative market reaction to claims by Canada that Iran shot down an airliner in Tehran this week, killing 176 people.

Investors are now looking to the release later in the day of US jobs figures for a better idea about the state of the world’s top economy, while next week sees China and the US put pen to paper on their mini trade deal.

The “critical payroll data comes as a most welcome distraction and will provide an essential update on the pace of US job gains,” said Stephen Innes at AxiTrader.

“With US economic growth mostly dependent on the consumer, a healthy labour market is crucial to any constructive ‘risk-on’ narrative.”

“With the market backdrop remaining supportive–-namely, improving macro, central bank easing, and receding… risk around trade, Brexit, and the Middle East, the path of least resistance remains up.”

Oil prices dipped, with the sharp gains enjoyed in the wake of the US assassination of Iran’s top general last week being wiped out. The commodity is now below levels seen before the killing early last Friday. With AFP