The local stock barometer sank further on Tuesday as the escalation of the US-China trade war continued to spook regional markets.
The main-share Philippine Stock Exchange index (PSEi) slid by 123.27 points or 1.56 percent to close at 7,766.75, battered by heavy net foreign selling that reached P1.67 billion.
“It was a bloodbath again today for global equities’ markets after Washington labelled Beijing a currency manipulator, escalating already heightened tensions between the two nations,” AAA Equities head Christopher Mangun said in a research note.
Martin Petch, vice president for sovereign risk group at Moody’s Investors Service, said the US Treasury’s designation of China as a “currency manipulator” would likely contribute to a hardening of positions and raise the likelihood that US tariffs on Chinese products would rise beyond current levels, followed by further retaliatory measures by China.
“Unless negotiations between the US and China resume rapidly, this latest development is likely to create negative spillover effects in both China, the US and globally, and particularly in Asia. At this stage, we do not expect the US Treasury designation to have a material impact on China’s foreign exchange policy. However, market expectations of potential further RMB (renminbi) devaluation may lead to devaluation in other currencies, particularly those with strong trading ties to China,” Petch said.
At the local market, while foreign investors were dumping local blue chips, Mangun noted that local investors were scooping them up at low prices.
“The PSEi is already down (by) a startling 4.5 percent this week, but economic fundamentals are looking really good. Inflation came in at 2.4 percent, the low-end of the consensus. We have second-quarter GDP (gross domestic product) coming in on Thursday and I’m still hoping it comes in above 6 percent. We will end the week lower but I’m banking on a recovery before the week is up,” Mangun said.
All counters tumbled, led by the mining/oil counter, which lost 2 percent. The financial and holding firm counter both declined by more than 1.7 percent while the industrial counter lost 1.54 percent.
The services and property sub-indices also slipped by over 1 percent.
Value turnover for the day amounted to P9.7 billion.
There were 165 decliners that overwhelmed 47 advancers, while 37 stocks were unchanged.
Investors dumped Jollibee for the second straight day after reporting a sharp decline in second-quarter profits. The fast-food giant lost 4.86 percent.
JG Summit, AEV and PLDT all declined by more than 3 percent, while Ayala Land, BPI and Metrobank all slumped by over 2 percent.
ICTSI, Ayala Corp., BDO, GT Capital and Security Bank all slipped by more than 1 percent.
SM Prime and URC also declined.
One notable gainer outside the PSEi was Phinma Energy, which gained 3.92 percent.