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Market retreats; ICTSI, Marcventures advance

The stock market retreated Friday on profit taking and a new China-US flare-up that also sent the rest of Asian stocks lower.

The Philippine Stock Exchange Index fell 56.56 points, or 1 percent, to 5,846.02 on a value turnover of P10.9 billion. Gainers, however, beat losers, 113 to 82, with 46 issues unchanged.

SM Investments Corp. of the Sy Group dropped 3.1 percent to P850.50, while Bank of the Philippine Islands, the third-biggest lender in terms of assets, declined 4.5 percent to P62.55.

International Container Terminal Services Inc., the largest port operator and owned by tycoon Enrique Razon Jr., however, rose 6.6 percent to P103.90, while nickel ore miner Marcventures Holdings Inc. jumped 18.8 percent to P1.01.

The rest of Asian markets tumbled while the mood was also soured by US lawmakers' struggles to agree on a new economic stimulus—all against a backdrop of surging virus infections.

China-US tensions were back on traders' minds after US President Donald Trump signed an executive order barring US residents from doing any business with the Chinese parent companies of social media platforms TikTok and WeChat, citing national security concerns.

The move, which comes into force in 45 days, is the latest salvo in a tech stand-off between the superpowers and adds to a laundry list of issues they have butted heads over in recent months, including Hong Kong, Huawei and the coronavirus.

WeChat parent Tencent sank 10 percent at one point in Hong Kong, while the city's Hang Seng Index dropped. The yuan also took a hit against the dollar.

"The US government is expected to follow up with more measures targeting Tencent," Steven Leung, at UOB Kay Hian (Hong Kong), said.

"Tencent's overseas expansion map now looks a bit uncertain, since some M&A deals, especially if its targets are based in the US, will face challenges."

The move rippled around Asian markets, with investors concerned about increasingly bitter relations between the economic titans that some fear could lead to a renewal of their painful trade war.

The news also overshadowed data showing a surprise jump in Chinese exports for July.

Hong Kong and Shanghai dropped more than one percent, while Tokyo finished 0.4 percent lower.

Wellington and Jakarta gave up one percent, while Sydney, Mumbai, Taipei, Singapore and Bangkok were also in the red.

"Apart from the obvious fallout to Tencent and ByteDance, Washington DC's moves are sure to ratchet up geopolitical tensions with Beijing once again," said OANDA's Jeffrey Halley.

Meanwhile, a group of regulators working for Trump suggested stock exchanges impose stricter rules on firms to open up their audit papers to US accountants, which could lead to the delisting of Chinese companies.

In Washington, the bipartisanship that passed a multi-trillion-dollar rescue package earlier this year has given way to the familiar Capitol Hill wrangling as Democrats and Republicans refuse to budge on key issues.

With the Democrats' $3.5-trillion proposal more than three times the size of the Republicans' offer, a deal appears a distant hope, despite a Friday deadline. With AFP

Topics: stock market , Philippine Stock Exchange Index , SM Investments Corp.
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