By Arra B. Francia
THE MAIN INDEX spiraled down to the 7,500 level on Thursday, after the United States planned to raise tariffs on $7.5 billion of European goods, escalating the global trade war.
The bellwether Philippine Stock Exchange index (PSEi) plunged 0.85% or 65.13 points to 7,545.55 yesterday, extending losses to the fifth session. The broader all-shares index likewise fell 0.68% or 31.67 points to 4,604.01.
“The local market joins its regional peers in the sell-off amid renewed global economic worries and US-EU trade concerns,” Philstocks Financial, Inc. said in a market note.
US President Donald J. Trump secured clearance from the World Trade Organization (WTO) to impose tariffs on European Union goods such as aircraft and agricultural products. This came after a WTO ruling over illegal subsidies for plane-makers Airbus and Boeing.
The additional tariffs are set to take effect on Oct. 18, further dampening investor sentiment which is already affected by slowing global growth.
Wall Street indices tanked after the announcement. The Dow Jones Industrial Average plummeted 1.86% or 494.42 points to 26,078.62; the S&P 500 index fell 1.79% or 52.64 points to 2,887.61; while the Nasdaq Composite index shed 1.56% or 123.44 points to 7,785.25.
Asian markets followed suit, with Japan’s Nikkei 225 down 2.01% or 436.87 points to 21,341.74. Its Topix index likewise declined 1.72% to 1,568.87, while South Korea’s Kospi index also dropped 1.95%. Chinese indices remained closed for its week-long celebration of their country’s foundation anniversary.
Meanwhile, AAA Southeast Equities, Inc. Research Head Christopher John Mangun pointed out that the 7,500 mark is the same level the local bourse was hovering in at the start of the year.
“The last time it came down to this level back in May, we then saw a rally of at least 500 points. If this level down not hold, then we may end the year closer to the 7,000 level…After five consecutive days of losses, tomorrow may be the day we end in the green,” Mr. Mangun said in an e-mail on Thursday.
Four sectoral indices moved to negative territory, led by property which retreated 2.18% or 87.12 points to 3,897.50. Holding firms fell 1.27% or 95.65 points to 7,434.48; financials went down 0.55% or 9.71 points to 1,752.46; while mining and oil slipped 0.09% or 7.90 points to 8,665.42.
In contrast, industrials climbed 0.81% or 83.87 points to 10,338.64, while services rose 0.65% or 9.77 points to 1,502.66.
Turnover improved to P8.30 billion after some 570.16 million issues switched hands, against the previous session’s P6.14 billion.
Decliners outpaced advancers, 141 to 42, while 58 names ended flat.
Net foreign selling swelled to P1.26 billion from P497.98 million on Wednesday.