Fresh US-China tensions pull local stocks down

PHILIPPINE shares closed the trading week in the red, slipping back to the 5,500 territory on renewed tensions between the United States and China.

The benchmark Philippine Stock Exchange Index (PSEi) shed 1.17 percent or 65.30 points to close at 5,539.19, while the wider All Shares slid by 0.74 percent to 24.98 points to end at 3,349.98 on Friday.

Regina Capital Development Corp. Managing Director Luis Limlingan said the market declined ahead of the long weekend and another flareup in tensions between the world’s two economic powerhouses.

“President [ Donald] Trump continued to express [his] distrust [of] China regarding ‘disinformation and propaganda against the US.’ [ His] administration sent a letter to Congress on how to deal with China, which ‘reflects a fundamental revaluation’ of the relationship,” Limlingan said.

Diversified Securities Inc. trader

Aniceto Pangan also attributed the market’s newest drop to the renewed tensions.

“With the regional markets down, local markets followed on rising tensions between [Washington and Beijing, and] also China’s New People’s Congress legislation of security laws designed to [rein in] Hong Kong’s pro-democracy protesters,” Pangan said.

In a market comment, Philstocks Financial Inc. also said geopolitical worries and Beijing’s planned security laws, alongside the 71-percent year-on-year decline in investment pledges approved by the Board of Investments pulled stocks down.

Philstocks research associate Piper Chaucer Tan said investors might have wanted to cash in amid the lack of positive developments.

US President Donald Trump tours Ford’s Rawsonville Components Plant, which has been converted to making personal protective and medical equipment, in Ypsilanti, Michigan, on May 21, 2020.

He added that investors were “on risk-off sentiment” as the market would be closed on Monday in observance of Eid’l Fitr.

Wall Street fell, with the Dow Jones, S&P 500 and Nasdaq slipping by 0.41 percent, 0.78 percent and 0.97 percent, respectively.

Asian markets also slid. Tokyo shed 0.8 percent, Shanghai slipped by 1.89 percent, Hong Kong lost 5.56 percent, Seoul fell by 1.41 percent, Jakarta was down by 0.06

percent, Singapore tumbled by 2.01 percent, Thailand dropped by 2.15 percent and Ho Chi Minh declined by 1.16 percent.

In Manila, sectors had a bloodbath, with financials losing the most at 1.85 percent.

Volume turnover was at 501.94 million shares, valued at P4.03 billion.

Decliners edged out advancers, 125 to 49, while 44 issues were unchanged.