Trade worries drag stock market ahead of US-China pact signing
Credit to Author: Tyrone Jasper C. Piad| Date: Wed, 15 Jan 2020 16:20:02 +0000
DESPITE the imminent signing of a so-called phase-one trade agreement between the United States and China, the stock market slipped out of the 7,700 territory on Wednesday, mainly on investors’ concerns over the next round of negotiations between the world’s two biggest economies.
The benchmark Philippine Stock Exchange index (PSEi) plunged by 1.65 percent or 128.85 points to close at 7,664.40, while the wider All Shares slipped by 1.45 percent or 66.67 points to finish at 4,539.30.
In a market comment, Philstocks Financial Inc. said “[w]orries over tariffs [that remained in place]…pulled the local market down.”
Ahead of the signing of the mini trade deal in Washington on Wednesday (Thursday in Manila), a joint statement from the US Treasury and the US Trade Representative’s office said the pact did not include rolling back those tariffs.
The statement came after a Bloomberg report said tariffs on billions of dollars in Chinese goods would stay in place until after the US presidential election in November, after which they might be removed.
Although the expected inking of the agreement buoyed the mood of trading floors around the world, analysts warned there would not likely be much more progress on the next phase of talks in the next several months.
The next round of negotiations is expected to be the toughest, with key issues including China’s massive subsidies for state industries and forced technology transfers proving to be key sticking points.
Philstocks said the eruption of Taal Volcano on Sunday also dampened market sentiment, while 2TradeAsia said the 7,700 support broke because of “thin trades, with foreigners net selling at P884 million.”
Wall Street was mixed, with the Dow Jones rising by 11 percent and the S&P 500 and
Nasdaq dipping by 0.15 percent and 0.24 percent, respectively.
Asian markets all retreated. Tokyo slid by 0.45 percent, Shanghai fell by 0.54 percent, Hong Kong shed 0.51 percent, Seoul declined by 0.35 percent, Jakarta lost 0.89 percent, Singapore dropped by 0.43 percent, Thailand fell by 0.51 percent and Vietnam decreased by 0.09 percent.
In Manila, all sectors dropped, except mining and oil, which rose by 0.23 percent.
Volume turnover stood at 667.02 million shares amounting to P7.04 billion.
Losers led winners, 118-76, while 35 issues were unchanged.
WITH REPORTS FROM AFP