Market drops for 5th straight day
The stock market fell for the fifth straight day Tuesday, weighed down by a government report showing inflation rate accelerated to 4.5 percent in February, the fastest increase in consumer prices in three-and-a-half years, from 4 percent in January.
The Philippine Stock Exchange Index declined 25.95 points, or 0.3 percent, 8,360.22 on a value turnover of P8.6 billion. Losers beat gainers, 122 to 93, with 45 issues unchanged.
The higher inflation rate may prompt the Bangko Sentral ng Pilipinas to raise interest rates to temper prices, but Governor Nestor Espenilla Jr. said the price spikes could be “transitory.”
Major property developer Ayala Land Inc. lost 1.1 percent to P41.20, while Waterfront Philippines Inc. slumped 22.2 percent to P1.05.
Bloomberry Resorts Corp., which operates a casino on part of reclaimed area in Manila Bay, added 1.1 percent to P14.46, while conglomerate JG Summit Holdings Inc. of industrialist John Gokongwei rose 1.6 percent to P65.70.
Most of the stock markets in Asia, meanwhile, surged Tuesday as shock over Donald Trump’s controversial trade tariffs move gave way to hope that any measures will not be as bad as initially thought.
All three main indexes on Wall Street rose between one and 1.4 percent Monday and those gains filtered through to Asia on Tuesday.
Tokyo ended 1.8 percent higher, with Kobe Steel up slightly ahead of a news conference in which its CEO Hiroya Kawasaki resigned following publication of a report by the firm that found staff—including executives—changed or falsified inspection data before shipping products.
Hong Kong jumped more than two percent, while Sydney, Seoul, Singapore and Taipei were all more than one percent higher. Shanghai reversed early losses to close one percent higher.
Trump sparked fears of a global trade war last week when he unveiled plans to slap levies on imports of steel and aluminum.
The news sent markets into a tailspin from Sydney to New York, with investors already on edge at the prospect of rising interest rates and the end of crisis-era central bank stimulus measures.
However, after another down day in Asia Monday, investors in New York rushed back as they bet that Trump would not push through with extreme protectionist policies.
“Given the overwhelmingly negative response from industry leaders, international financial markets and even the furious backlash from loyal members of Trump’s administration, there is growing optimism that perhaps significant exemptions will be forthcoming,” said Stephen Innes, head of Asia-Pacific trade at OANDA.
“Investors remain guardedly optimistic.”
However, he warned that “expecting for cooler heads to prevail might be far too optimistic given that President Trump promoted reforms of US trade policies as a cornerstone of his election campaign, and it’s challenging to envision him backing down.”
Trump campaigned on a protectionist “America First” platform, promising to pull out of global trade deals which he said were hurting US workers.