PSEi drops to 6,900 on trade war worries
The stock market closed below 7,000 on Monday, hitting a new 17-month low as fresh trade threats from the US spooked investors.
The benchmark Philippine Stock Exchange index (PSEi) appeared headed for a rebound for most of the day, staying above 7,100 from a 7,240.06 open, but rapidly lost ground in late trading to finish at 6,986.88 — down 76.32 points or 1.08 percent from Friday.
It was the lowest close since the 6,861.31 seen on January 3, 2017 and likewise marked a 22.8 percent plunge from January 29, 2018’s record finish of 9,058.62.
The broader All Shares fell by 0.82 percent or 35.65 points to 4,311.41.
“It’s still the same reason which pulled the market to new lows,” Timson Securities, Inc. trader Jervin de Celis said.
“The trade tensions between major economies are threatening the global economic growth that’s why investors took the gap up this morning as a chance to sell their positions,” he added.
Papa Securities Corp. trader Gio Perez said investors had taken the opportunity to take some profits as the PSEi had opened 176.86 points up from Friday’s close.
Diversified Securities, Inc. trader Aniceto Pangan echoed the view that trade tensions were to blame for the drop, noting that Philippine markets fell in line with regional counterparts following reports that the US was considering increased scrutiny of Chinese investments.
Bloomberg reported on Monday that the Washington was planning to use an emergency law to declare that Chinese investments in US technology companies were a threat to economic and national security.
This followed a tweet from US President Donald Trump on Sunday warning countries of “more reciprocity” if they had implemented “artificial” trade barriers against American products.
Markets worldwide have been spooked for weeks by tit-for-tat tariff threats and Monday’s plunge was no exception. Tokyo decreased 0.79 percent, Shanghai slumped 1.05 percent, Hong Kong plunged 1.29 percent, Singapore shrank 0.75 percent, and Bangkok fell 0.61 percent.
Only Seoul and Jakarta gained by 0.03 percent and 0.64 percent, respectively.
In Manila, sectoral results were mixed with the services, industrial, and mining and oil indices the only gainers — up by 0.47 percent, 0.73 percent, and 1.01 percent, respectively.
Volume turnover reached 715 million issues valued at P6.1 billion.
Losers led winners, 101 to 80, while 59 issues were unchanged.
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