PSE index sinks as US-China trade war heats up
By Arra B. Francia, Senior Reporter
THE MAIN INDEX fell on weak sentiment from US market futures due to the escalation in the US-China trade war.
The benchmark Philippine Stock Exchange index (PSEi) lost 1.43% or 113.82 points to close at 7,804.71 yesterday, extending the previous session’s decline. The broader all-shares index likewise plunged 1.18% or 56.98 points to 4,740.61.
“It was a quiet day for the index until a massive selldown at the close… The selldown could possibly be attributed to US futures being down by 1.0% at the moment as this signals how the US market will move tonight — effectivity of tariffs last Sept. 1 being the cause,” Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an e-mail on Tuesday.
Futures on the Dow Jones Industrial Average went down 199 points or 0.84%, while S&P 500 futures also sank 0.7%. Investors may take their cues from the futures indices’ movements once US markets resume trading after the Labor Day holiday.
General sentiment remained cautious after the US increased tariffs on Chinese goods by 15% on Sunday, Sept. 1.
The US and China are reportedly struggling to agree on when they can continue the trade talks, amid the rising tariffs.
Asian markets ended mixed, with Japan’s Nikkei 225 up 0.02% or 4.97 points to 20,625.16. The Hang Seng index tumbled 0.39% or 98.70 points to 25,527.85, while the Shanghai Composite rose 0.21% or 6.05 points to 2,930.15.
Back home, the mining and oil counter was the only bright spot for the market as it jumped 2.48% or 228.93 points to 9,429.40. Mining firms continued to enjoy a boost in sentiment as they expect to benefit from Indonesia’s export ban on its nickel output.
“Investors are currently focusing on mining stocks after Indonesia came out and announced that they would be banning exports two years earlier than the original plan,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.
The rest of the counters went down, led by holding firms which dropped 1.86% or 146.74 points to 7,734.42. Services shed 1.6% or 25.91 points to 1,587.91; property slumped 1.26% or 50.65 points to 3,940.63; industrials retreated 1.05% or 116.74 points to 10,915.64; while financials dipped 0.47% or 8.64 points to 1,794.98.
Some 1.19 billion issues valued at P6.83 billion switched hands, improving from the previous session’s P5.27 billion. Decliners were almost double the advancers, 125 to 67, while 56 names ended flat.
Foreign investors turned net buyers at P104.99 million, compared to Monday’s P665.19 million in net sales.
“The PSEi broke below its support of 7,920 and may now test the next support line at 7,750. The general investor sentiment for our market continues to remain very cautious despite almost hitting 8,000 last week,” AAA Equities’ Mr. Mangun said.
