Wall Street plunge prompts dip for PSEi
Credit to Author: ANGELICA BALLESTEROS, TMT| Date: Wed, 26 Dec 2018 16:19:44 +0000
THE stock market opened its final trading week for 2018 on a down note, dipping 0.40 percent in what analysts said was a reaction to Monday’s Wall Street plunge.
Holidays on December 24 and 25 insulated the bellwether Philippine Stock Exchange (PSEi), which lost 29.70 points to close at 7,450.01 on Wednesday. The broader All Shares dipped 0.26 percent or 11.66 points to finish at 4,489.92.
The losses were not as large as those experienced by the Dow (2.91 percent), S&P 500 (2.71 percent) and the Nasdaq (2.21 percent) — the worst ever for Wall Street on a Christmas Eve — after
Treasury Secretary Steven Mnuchin’s efforts to reassure investors fell flat.
Also contributing to the rout were weekend reports that US President Donald Trump was seeking advice on whether he could fire US Federal Reserve chairman Jerome Powell. Trump again berated the US central bank on Tuesday.
Monday’s rout had carried over to Asia on Christmas Day, sending the few markets open — such as Tokyo and Shanghai — tumbling.
Japanese stocks recovered slightly on Wednesday, gaining 0.89 percent, but Shanghai fell for a second day.
Analysts said investors had been spooked by Trump’s unpredictable behavior.
“The markets are in panic mode that the US economy is tanking, expecting the benefit of Trump’s fiscal stimulus will falter in 2019,” said Stephen Innes, head of Asia-Pacific trade at OANDA.
“After all, it was the US market that was carrying the weight of global risk sentiment on its shoulder. If the US economy turns south, global capital markets are in for a world of hurt.”
However, Norio Miyagawa, senior economist at Mizuho Securities, said that despite the recent market rout, there has been no clear sign of a recession in the US.
“Our judgement is that the US economy remains solid at the moment”, though investors need pay attention to the possible impact of US trade rows with other countries on financial markets and business outlooks, he said in a note.
In Manila, P2P Trade Online sales associate Gabriel Jose Perez said: “With the PSEi continuing to be hindered by general sentiment abroad, accompanied by net foreign selling, we look to the initial support of the index in the area of 7,350.”
“Furthermore, we might see more of the quiet trading we’ve seen today in the next two days with the upcoming holidays,” he added.
Net foreign selling amounted to P766.4 million as foreign funds bought P1.27 billion issues and disposed of P2.03 billion.
Only the property and mining and oil indices settled in the green, gaining 0.25 percent and 2.93 percent, respectively.
Volume turnover was thin with 771 million issues valued at P3.38 billion traded.
Losers led winners, 115 to 70, while 41 issues were unchanged.
With a reports from AFP
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