By Arra B. Francia, Senior Reporter
LOCAL EQUITIES retreated further on Tuesday, as trade war tensions escalated after the United States called out China for allegedly manipulating its currency.
The benchmark Philippine Stock Exchange index (PSEi) fell 1.56% or 123.27 points to close at 7,766.75 yesterday, continuing the previous session’s decline. The broader all-shares index likewise plunged 1.18% or 57.20 points to 4,763.91.
“The bloodshed trickled down to Philippine shares brought about by US and Asia as trade war continues and investors flee from equities to safe haven assets such as bonds and gold,” Philstocks Financial, Inc. Research Associate Piper Chaucer E. Tan said in a text message.
US President Donald J. Trump last week proposed an additional 10% tariff on $300 billion worth of Chinese imports, including smartphones, toys, and other consumer goods.
Tensions further escalated when the US called China a “currency manipulator” following the yuan’s drop against the dollar on Monday.
With this, the Dow Jones Industrial Average sunk 2.9% or 767.27 points to 25,717.74. The S&P 500 index plummeted 2.98% or 87.31 points to 2,844.74, while the Nasdaq Composite was sold down 3.47% or 278.03 points to 7,726.04.
AAA Southeast Equities, Inc. Research Head Christopher John Mangun noted that the PSEi is already down by 4.5% for the week, but cited the strong economic fundamentals that could support a recovery.
“Inflation came in at 2.4%, the low end of the consensus. We have Q2 GDP (gross domestic product) coming in on Thursday and I’m still hoping it comes in above 6%. We will end the week lower but I’m banking on a recovery before the week is up,” Mr. Mangun said in an e-mail.
The Philippine Statistics Authority reported Tuesday that inflation eased to a two-year low of 2.4% in July. This matched the median yield from a BusinessWorld poll of 17 analysts and a research group taken last week.
All sectoral indices moved to negative territory, with the mining and oil counter falling the most as it dropped 2.01% or 165.47 points to 8,030.31. Financials slumped 1.71% or 31.18 points to 1,783.33; holding firms fell 1.69% or 130.76 points to 7,568.04; industrials lost 1.54% or 171.29 points to 10,946.18; services slipped 1.39% or 22.09 points to 1,561.84; and property dropped 1.17% or 49.09 points to 4,125.28.
Turnover swelled to P9.71 billion after some 1.40 billion issues switched hands, against Monday’s P6.37 billion.
Philstocks’ Mr. Tan noted that the value turnover was above average as most investors unloaded their shares, while only two index firms were spared from the negativity.
Foreign investors remained net sellers at P1.68 billion, higher than Monday’s P1.19 billion.
Decliners swamped advancers, 165 to 47, while 37 names were unchanged.