THE LOCAL MARKET fell on Monday amid fears of a contagion due to financial volatility in Turkey as it becomes a target of a trade war initiated by the United States.
The bellwether Philippine Stock Exchange index (PSEi) slumped 2.17% or 169.71 points Monday, August 13, to close at 7,635.27.
The broader all-shares index dropped 1.74% or 82.16 points to 4,632.53.
“Our index fell due to the pessimism in Turkey,” Jervin S. de Celis, trader at Timson Securities, Inc. said in a mobile message on Monday.
“This is more of a sentiment-driven sell-off since investors are scared that the Turkish crisis may also drag its trading partners in case the US imposes a sanction on the Erdogan-led country,” he added, noting that Turkey is not even within the top 10 trading partners of the Philippines.
US President Donald Trump intensified his spat with Turkey on Friday by imposing higher tariffs on metal imports, deepening turmoil in Turkish financial markets.
Criticizing the state of the US’ relationship with Ankara, Mr. Trump announced on Twitter that he had authorized a doubling of duties on aluminum and steel imported from Turkey, making them 20% and 50%, respectively.
The White House said Mr. Trump would use a section of US law that allows for tariffs on national security grounds to impose the increased duties.
Washington and Ankara have been at odds for months over an American pastor detained in Turkey, the Syrian civil war and other diplomatic issues.
Turkish President Recep Tayyip Erdogan, who earlier called on the Turks to buy lira in exchange for dollars to save the crumbling currency, assured that the country will not fear “economic hitmen.”
Meanwhile, Regina Capital Development Corp. Managing Director Luis A. Limlingan noted the Philippine market is also wary amid the start of the Chinese ghost month.
“Investors are being cautious as the MSCI will later release the results of their latest portfolio rebalancing…,” Mr. Limlingan added in a mobile message on Monday.
All counters ended in negative territory Monday, August 13. Property declined the most, losing 2.88% or 112.24 points to close at 3,778.26. Holding firms plunged 2.81% or 217.44 points to 7,505.69; industrials dropped 1.21% or 134.71 points to 10,999.75; financials lost 1.19% or 22.11 points to 1,832.66; services fell 0.9% or 13.93 points to 1,521.47; and mining and oil edged down 0.8% or 83.17 points to 10,242.48.
Losers trumped advancers, 140 to 58, while 39 issues were unchanged.
Monday saw 1.44 billion shares traded which were valued at P5.17 billion, down from the P8.33 billion logged on Friday.
Foreigners continued to dump their shareholdings, with net sales totaling P830.21 million, more than the P515.89-million net outflow on Friday. — Janina C. Lim with Reuters

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