LOCAL STOCKS continued to climb on Thursday as investors brushed off ongoing developments in the US-China trade war.

The 30-member Philippine Stock Exchange index (PSEi) gained 38.80 points or 0.49% to close at 7,836.55 yesterday. The broader all-shares index was also up by 17.27 points or 0.35% to finish at 4,822.06.

“Our index closed positive today after the banking, services, and industrial sector lifted the PSEi due to strong foreign buying activity. Despite the threat that China might use rare earth exports as weapons against the US, our market defied these news and still closed by 38 points today,” Jervin S. de Celis, equity trader at the Timson Securities, Inc., said on Thursday.

“US-China trade tensions continue to weigh on stocks after Chinese state media reports underlined the country’s scope to use rare-earth minerals, used in the production of an array of devices such as mobile phones, computer memory chips and rechargeable batteries, as an economic weapon,” Luis A. Limlingan, head of sales of Regina Capital Development Corp., said in a mobile phone message.

US companies are years away from challenging Chinese dominance of rare earth minerals due to a lack of domestic processing facilities, ensuring the Asian nation will maintain its near-monopoly on refining and powerful leverage in trade talks.

In an escalation of the trade conflict between the two countries, state media on Wednesday implied China could restrict rare earth sales to the United States, stoking fears about Beijing’s role as a supplier.

The US has excluded Chinese rare earth imports from recent tariff hikes, along with some other critical Chinese minerals. China, however, has raised tariffs on imports of US rare earth metal ores from 10% to 25%, making it less economical to process the material in China.

US stocks fell on Wednesday, as worries that a lengthy US-China trade war would crimp global growth pushed investors into the safety of government bonds.

Back home, sub-sectors were split. Gainers were led by industrials, which went up 154.53 points or 1.36% to 11,438.51. This was followed by financials, which climbed 24.38 points or 1.44% to 1,717.41. Services also gained 9.15 points or 0.55% to 1,661.87.

Meanwhile, the property sub-index shed 8.56 points or 0.2% to 4,229.25; mining and oil went down 8.43 points or 0.11% to 7,132.22; and holding firms dropped 1.23 points or 0.01% to 7.463.72.

Some 694.77 million issues valued at P6.57 billion switched hands on Thursday, slightly lower than the previous session’s P6.11 billion.

Meanwhile, foreigners turned net buyers yesterday after several sessions of outflows, logging a net inflow of P392.50 million versus Wednesday’s net sales worth P304.87 million.

Advancers also beat losers, 97 to 80, while 53 names closed unchanged yesterday. — Vincent Mariel P. Galang with Reuters

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