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Bourse dips on weak foreign leads

 

The stock market fell on Thursday as investors digested the weak economic data from China and Germany.

The bellwether Philippine Stock Exchange index dropped to as low as 7,624 in intraday trading before closing at 7,828.86, 0.38 percent or 29.79 points lower than Wednesday’s 7,858.65. The wider All Shares dropped by 0.47 percent or 22.57 points to end at 4,746.35.

“Local shares opened sharply lower, before finishing just 30 points down as weak economic data from China [and] GDP (gross domestic product) contraction in Germany,” Regina Capital Development Corp. head of sales Luis Limlingan said.


China’s economy showed further signs of strain in July, with industrial output falling to 4.8 percent in the month from 6.3 percent in June — its lowest level in 17 years — while investment and retail sales also slowed.
These figures are the latest highlighting how the world’s second-largest economy is being battered by an escalating trade war with the United States and weak global demand.

Trade tensions between Washington and Beijing — which began more than a year ago, when US President Donald Trump publicly accused China of engaging in unfair trade practices — saw the two imposing tit-for-tat tariffs worth billions of dollars on each others’ goods.

Negotiations between the two sides to resolve the tensions stalled in May. Trump and his Chinese counterpart Xi Jinping agreed to a truce during a Group of 20 meeting in Osaka, Japan, in late June. American and Chinese trade negotiators met in late July with little progress made. Early this month, Trump announced new tariffs after alleging that China had reneged on its promise to buy US agricultural goods.

Beijing suspended these purchases in response, and saw its currency weaken — a move the US government said was deliberate.

Meanwhile, Germany’s economy contracted in the second quarter, highlighting its vulnerability to trade tensions and stoking debate on higher government spending.

Its shrinkage of 0.1 percent meant the economy lost significant momentum, compared with the 0.4-percent growth seen from January to March.

“The global market sentiment continues to deteriorate, and we are seeing the effects all over the world. Foreign investors continue to flee our market, while local investors are doing their best from keeping it from a total meltdown,” AAA Equities head of research Christoper Mangun said, pegging the support level at 7,750.

US markets were down, with the Dow Jones recording the deepest drop at 3.05 percent, followed by Nasdaq and S&P 500 at 3.02 percent and 2.93 percent, respectively.

Asian markets were mixed. Shanghai, Hong Kong and Seoul went up by 0.25 percent, 0.67 percent and 0.65 percent respectively. In contrast, Tokyo, Jakarta, Singapore and Thailand dropped by 1.21 percent, 0.72 percent, 1.37 percent and 0.68 percent, respectively. (See related story on B4)

In Manila, holding firms rose by 0.63 percent, bucking all the sectors that nearly ended in a bloodbath.

Volume turnover reached 789 million, amounting to P11.81 billion.

Losers led winners, 149-54, while 42 issues were unchanged.

 WITH A REPORT FROM AFP

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Today’s Front Page February 27, 2020

Today’s Front Page February 27, 2020