Shaky US Congress in time of Trump unhinges markets

The stock barometer slipped for a second day in a row as investors fretted over the inability of a Republican-dominated US Congress to pass a healthcare legislation championed by US president Donald Trump.

The main-share Philippine Stock Exchange index (PSEi) shed 23.65 points or 0.33 percent to close at 7,245.97, tracking mostly sluggish regional markets.

At the local market, foreign investors were net sellers, with their transactions reaching P520 million.

“Following the cancellation of the House vote on the health bill, [US] Congress is likely to turn its attention to the Supreme Court nomination and budgetary issues. Preliminary discussions on tax reform could begin soon but we do not expect legislative action on tax reform until June,” said Luis Gerardo Limlingan, managing director at Regina Capital Development.

Limlingan said US futures continued to indicate weakness following the US Congress’ failure to repeal the Obamacare, the previous administration’s banner health care program.

“Although tax reform appears to have broader support and may be easier to pass, [Trump’s healthcare] experience sends investors a cautionary message about opposing factions within the GOP (Grand Old Party/Republican) caucus, especially with key details—especially around the implementation of border tax adjustments—still not having found support from the consensus,” Citigroup said in a research note.

It said markets would be entering another period of assessments as events unfold in Washington.

At the local market, the PSEi was weighed down by the financial, industrial and holding firms. The services, mining/oil and property counters firmed up.

Value turnover for the day amounted to P7.77 billion. There were 81 advancers which were outnumbered by 90 decliners, while 51 stocks were unchanged.

The PSEi was weighed down most by Jollibee and Metrobank, which both slipped by over 3 percent. Ayala Corp. fell by 2.31 percent.

Ayala Land and SM Investments both declined by over 1 percent.

PLDT gained by 3.12 percent while SM Prime, GT Capital, URC and LTG rose by over 1 percent. Semirara and BPI also firmed up.