Local stocks tumble on trade war fears

Font Size

By Janina C. Lim, Reporter

THE Philippine stock market dropped on Friday, along with the rest of Asia, amid fears of a looming trade war between the United States and China.

The Philippine Stock Exchange index (PSEi) fell 1.89% or 153.65 points to 7,970.80 points on Friday. The broader all-shares index shed 1.35% or 66.01 points to 4,824.16 points.

“Trade war fears brought down the value of Philippine shares,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.

“All major regional indexes dropped broadly and volatility spiked as the Trump administration’s plans to announce new trade restraints against China renewed fears about a potential trade war that could dent economic growth,” he added.

President Donald J. Trump unveiled on Thursday extensive new trade restrictions that would effectively block up to $60 billion in Chinese goods from entering the United States.

On Friday, U.S. import tariffs on steel and aluminium announced by Mr. Trump earlier this month went into effect. In response, China revealed plans to impose additional duties on up to $3 billion of US imports such as fresh fruit, wine and nuts.

Jervin S. de Celis, equity trader at Timson Securities, Inc., said the escalating tensions may threaten US economic growth since China is one of its top trading partners.

“I expect the pessimism to linger in the markets and in this case we may see further downward bias for the PSEi,” Mr. de Celis added in a mobile message.

All counters finished in the red. Holding firms were hit the hardest, falling 2.04% or 165.15 points to 7,923.41 points.

The property sector slumped 2.02% or 74.71 points to 3,629.06 points; while financials dropped 1.89% or 39.46 points to 2,053.15 points.

Services shed 1.38% or 23.52 points to 1,679.98 points; while mining and oil fell 1.03% or 112.59 points to 10,827.03 points.

A total of 2.55 billion issues worth P8.65 billion changed hands, slightly higher than the 2.02 billion issues valued at P8.37 billion on Thursday.

Losers trumped advancers, 143 to 69, while 39 ended unchanged.

Foreigners continued selling their holdings, with net outflows at P1.07 billion from the P180.05 million on Thursday.