PSEi drops below 8,000 on US-China trade talks
By Denise A. Valdez
Reporter
THE PHILIPPINE Stock Exchange index (PSEi) failed to stay above the 8,000 level yesterday as investors were alarmed on seemingly dwindling trade negotiations between United States and China.
The local bellwether trimmed 64.87 points or 0.81% to close at 7,947.47 on Wednesday.
The broader all shares index likewise gave up 24.73 points or 0.51% to end the session at 4,763.89.
“Market drifted lower whilst Trump made fresh comments on trade deal hinting that existing tariffs will be raised if no deal is made (with China),” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.
Bloomberg reported Wednesday US President Donald Trump warned of increasing tariffs on Chinese products “very substantially” if the trade talks don’t lead to an agreement soon. He also said such move will be made for other countries that will “mistreat” the US as well.
The comments were made in a speech to the Economic Club of New York, where Mr. Trump also said he will only sign the trade deal with China if it will benefit American companies and workers.
Markets in the Asia Pacific ended negatively amid the developments. Japan’s Nikkei 225 and Topix indices fell 0.85% and 0.55%, respectively. Hong Kong’s Hang Seng Index, Australia’s S&P/ASX 200 and China’s Shanghai SE Composite index also dropped 1.82%, 0.81% and 0.33%, respectively.
At the PSE, mining and oil was the only sectoral index to advance on Wednesday’s close, increasing 41.35 points or 0.46% to 8,911.52.
All other counters declined. Industrials went down 109.42 points or 1.05% to 10,301.48; financials dropped 16.31 points or 0.84% to 1,907.06; holding firms lost 64.52 points or 0.81% to 7,832.75; property declined 17.06 points or 0.41% to 4,126.41; and services sank 5.26 points or 0.33% to 1,548.42.
Value turnover on Tuesday was reduced to P4.63 billion from P4.73 billion a day prior, with 1.17 billion issues changing hands.
Stocks that declined outnumbered those that gained, 105 against 73, while 59 others were ended flat.
Net foreign selling increased to P720.69 million on Wednesday from Tuesday’s P392.04 million.
Papa Securities Corp. Sales Associate Gabriel Jose F. Perez said in an e-mail the bigger net selling was a factor for the main index’s decline. “A lack of any near-term catalysts has left the index trading sideways for the past few days,” he said.
“A close below the 8,000 mark puts the index’s next support at its 200-day MA (moving average) of 7,900, only a few points away. The recent MACD (moving average convergence/divergence) Bearish crossover is a red flag that this area could be broken in the near-term,” Mr. Perez added.
