PHILIPPINE SHARES joined their regional peers in an upsetting trading close on Wednesday as investors reacted to news that US tariffs on Chinese goods will remain despite the signing of the phase one trade deal.
The Philippine Stock Exchange index (PSEi) gave up 128.85 points or 1.65% to close at 7,664.40 on Wednesday. The broader all shares index also lost 66.67 points or 1.44% to end at 4,539.30.
“The market was heavily sold by foreigners today amounting to P883.99 million worth of shares sold, erasing the P623 million worth of stocks bought by foreigners the past two trading days,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message Wednesday.
“This market activity may have been due to reports last Tuesday that US President Trump intends to keep US tariffs on Chinese imports until after the US presidential elections. Investors may have opted for safe-haven assets right now given the uncertain events happening globally,” he added.
Even as US and China were set to sign its phase one trade deal in a ceremony in Washington later on Wednesday, global uncertainty continues to loom on the two countries’ trade relationship, with reports that US tariffs will hold until after the US elections in November.
Citing unnamed sources, Bloomberg reported early Wednesday that tariffs on $360-billion worth of Chinese imports will “likely stay in place until after the American presidential election.” It added that changes on the tariffs will depend on China’s compliance with the phase one trade deal the two countries were signing yesterday.
As a result, most Asian markets ended in red territory at the close of Wednesday’s trading. Japan’s Nikkei 225 and Topix indices shed 0.45% and 0.51%, respectively; China’s Shanghai SE Composite index fell 0.54%; Hong Kong’s Hang Seng index dropped 0.39%; and South Korea’s Kospi index went down 0.35%.
AAA Southeast Equities, Inc. Research Head Christopher John Mangun also said the decline in the main index was a result of selling on PSEi members.
“Blue chips were battered today as investors scrambled to sell and cash out. This may be attributed to the constant quakes in the south,” he said on Wednesday, referring to the eruption of Taal Volcano which remained at alert level four.
Most of the sub-sectors at the PSE were losers on Wednesday, led by financials, which lost 34 points or 1.85% to 1,802.72. Holding firms dropped 128.01 points or 1.68% to 7,493.46; industrials gave up 149.86 points or 1.57% to 9,383.22; services lost 22.04 points or 1.39% to 1,556.05; and property slipped 43.21 points or 1.06% to 4,024.26.
The sole gainer was mining and oil, which improved by 18.22 points or 0.22% to end at 7,969.46.
Some 667.02 million issues valued at P7.04 billion switched hands on Wednesday, lower than the P9.88 billion worth traded on Tuesday.
Declining names reached 118, advancing names stood at 76 while 35 were unchanged. — Denise A. Valdez with Bloomberg