PSEi falls to 7,200 as trade war heats up
The stock market plunged to the 7,200 level on Tuesday as investor sentiment was again rattled by an escalating trade war between the United States and China.
The Philippine Stock Exchange index (PSEi) dropped by 1.72 percent or 127.22 points to close at 7,286.34 while the wider All Shares fell 1.35 percent or 61.29 points to finish at 4,488.71.
First Grade Finance, Inc. Managing Director Astro del Castillo said market players lightened their portfolios after US President Donald Trump decided to levy a 10-percent tariff rate on Chinese imports beginning September 24, which would eventually increase to 25 percent on January 1 next year.
Trump also warned of further taxes to be imposed on some $267 billion worth of Chinese goods should Beijing pursue retaliation plans.
Del Castillo said investors were also assessing Typhoon Ompong’s inflationary impact, as the storm had battered northern Luzon over the weekend.
“Given the low value turnover, hopefully we’ll grind to a halt toward the 7,000 level or within this level, and then just move sideways and consolidate while waiting for more positive news for action [from the]government on how to somehow bring the confidence of investors [back],” he said.
The PSEi’s decline mirrored overnight losses on Wall Street but bucked regional results. Asian markets mostly rose on Tuesday as Trump had also given room for talks before jacking tariffs up to the highest rate.
After an early sell-off, regional markets enjoyed a bounce on hopes officials from the world’s top two economies will be able to thrash out an agreement before the end of the year.
The optimism has been boosted by the fact Trump left off some key items from the latest target list, while he is also due to meet Chinese President Xi Jinping in November and will likely want a deal in place.
By the end of the day Shanghai had rallied 1.8 percent and Tokyo was up 1.4 percent while Hong Kong gained 0.6 percent. Seoul gained 0.3 percent and Wellington put on 0.5 percent.
However, Sydney dipped 0.4 percent and Singapore 0.1 percent.
In Manila, all sectors dropped with the financials index down the most by 2.80 percent.
Volume turnover reached 1.23 billion issues valued at P6.6 billion.
Losers led winners, 155 to 50, while 35 issues were unchanged.
WITH A REPORT FROM AFP
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