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Shares drop on concerns over US-China trade war

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PHOTO BY SANTIAGO JOSE J. ARNAIZ

SHARES DOVE anew on Thursday, quickly reversing gains in the previous session as trade tensions pulled down most markets overseas.

The benchmark Philippine Stock Exchange index (PSEi)plunged 1.53% or 109.86 points to 7,066.57. The broader all-shares index also lost 1.28% or 56.07 points to 4,323.23.

“It looks like [Wednesday]’s 169-point gain wasn’t enough of a push as investors took profits today instead… Value turnover was weaker than [Wednesday] at only P5.8 billion as some may be looking forward to the aforementioned window dressing tomorrow,” Papa Securities Corp. trader Gabriel Perez said in an e-mail on Thursday.

The local index also tracked the lower finishes seen abroad as developments in the trade war between the United States and China continued to affect markets.

“Trade tensions took center stage locally and regionally along with US stocks reversing earlier gain despite oil surging,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.

US President Donald J. Trump announced on Wednesday that Washington will be using a strengthened national security review process to halt Chinese acquisition of sensitive American technologies.

“The announcement tamped down fears of an abrupt escalation in the trade war between the US and China that had roiled financial markets on Monday,” Mr. Limlingan added.

Wall Street indices also fell to their lowest levels since May, as the Trump administration’s softer stance on the trade war failed to offset the decline in large-cap tech firms. The Dow Jones Industrial Average slipped 0.68% or 165.52 points to 24,117.59. The S&P 500 shed 0.86% or 23.43 points to 2,699.63, while the Nasdaq Composite index dropped 1.54% or 116.54 to 7,445.08.

Most Asian indices also declined following the slowdown of tech stocks.

Back home, four sectoral indices moved to negative territory, led by the property sub-index which gave up 2.54% or 89.80 points to 3,444.08, followed by holding firms which dropped 2.04% or 145 points to 6,937.59. Industrials slumped 1.35% or 140.92 points to 10,254.44, while services declined 0.38% or 5.36 points to 1,371.74.

Meanwhile, mining and oil went up 0.10% or 9.84 points to 9,631.53, while financials added 0.05% or 1.04 points to 1,772.24.

Some 623.63 million issues switched hands, resulting in a turnover of P5.79 billion, lower than Wednesday’s P6.50-billion turnover.

Foreign investors were net sellers for a second day, dumping a net of P362.06 million worth of funds, higher than the P235.14-million net sales generated in the previous session.

Papa Securities said investors will be looking forward to DM Wenceslao and Associates, Inc.’s first day of trading at the stock exchange on Friday, following its initial public offering where it looked to raise up to P8.15 billion. — Arra B. Franca