PSEi down over 1% ahead of policy meets
THE stock market retreated on Tuesday as investors already in wait-and-see mode ahead of Thursday’s Monetary Board meeting were disheartened after China cancelled planned trade talks with the US.
The Philippine Stock Exchange index (PSEi) dropped by 1.37 percent or 101.44 points to close at 7,332.17 while the broader All Shares declined 0.81 percent or 36.63 points to end the day at 4,494.90.
Luis Limlingan, head of sales at Regina Capital Development Corp., said market players pared their positions after Beijing declared that trade negotiations “cannot be carried out under the threat of tariffs.”
Washington imposed new tariffs on $200 billion worth of Chinese goods on Monday and Beijing retaliated with duties on $60 billion in US products. Investors had largely discounted the latest salvos in the escalating US-China trade war as both sides were said to be preparing for fresh talks.
On Tuesday, however, Vice-Commerce Minister Wang Shouwen said it was impossible to hold negotiations while Washington was imposing tariffs that were like “holding a knife to someone’s throat”. He accused the US of abandoning a consensus struck in May.
Papa Securities Corp. trader Gabriel Jose Perez, meanwhile, said market players also sold ahead of the September 27 meeting of the Bangko Sentral ng Pilipinas’ policymaking Monetary Board.
Market consensus points to another 50-basis point rate hike, which would bring adjustments since May to a total of 150 bps.
Investors are also looking forward to the results of a September 24-25 US Federal Reserve policy meeting where the US central bank is expected to announce its third rate hike for the year.
The Dow and S&P 500 fell overnight ahead of the start of the US Fed meeting, with analysts pointing to the escalation of the US-China trade row. Fresh political uncertainty in Washington was also said to be a drag on
Wall Street, with speculation that US President Donald Trump could fire Deputy Attorney Rod Rosentein over reports that he had suggested removing the president from office.
Asian markets mostly rose on Tuesday but investors remained on edge after the latest tit-for-tat tariffs in the US-China row, while also looking ahead to the results of the Fed meeting.
Tokyo, back after a public holiday, ended 0.3 percent higher, Singapore added 0.7 percent and Taipei gained 0.1 percent. There were also gains in Mumbai, Bangkok and Wellington.
But Shanghai, also returning from a long weekend, fell 0.6 percent by the close, while Sydney was barely moved. Hong Kong and Seoul were closed for public holidays.
In Manila, all sectoral indices closed in the red with the property sector down the most by 2.40 percent.
Volume turnover was thin at only 612.4 million issues valued at P3.5 billion traded.
Losers led winners by 99 to 81, while 55 issues were unchanged.
with a report from AFP
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