Stocks retreated Tuesday, as concerns about upcoming European elections and Donald Trump’s unpredictable presidency fuel uncertainty across markets.
The Philippine Stock Exchange index, the 30-company benchmark, fell 31 points, or 0.4 percent, to close at 7,262.64, while the broader all-share index dropped 11 points, or 0.3 percent, to settle at 4,385.77 on a value turnover of P6.6 billion.
Losers outnumbered gainers, 108 to 93, while 42 issues were unchanged. Nine of the 20 most active stocks ended in the green, led by developer Century Properties Group Inc. which jumped 5.7 percent to P0.56 and conglomerate GT Capital Holdings Inc. which climbed 3.9 percent to P1,268. Chemical producer D&L Industries Inc. gained 3.8 percent to P12.98.
Meanwhile, most Asian markets also traded lower Tuesday. With investor nerves shredded by a succession of outbursts from the new US president, safe-haven assets are on the rise, with the yen surging to three-month highs against the dollar and gold pushing higher.
The weakness across markets is in contrast to the two-month rally that followed Trump’s election win in November, when dealers bet that his big-spending, tax-cutting plans would fan US growth and inflation and force interest rates up.
Tokyo’s Nikkei ended 0.4 percent lower as the stronger yen hit exporters. The greenback was hovering around 111.90 yen, up slightly from late Monday but well off Friday’s close.
The Japanese unit has surged about five percent against the dollar this year, clawing back most of the losses seen since Trump’s election, after he accused Tokyo and Beijing of currency manipulation to get a trade advantage over the US.
Japan’s former vice minister of finance for international affairs Eisuke Sakakibara said this week that Trump’s desire to boost US jobs means he must boost exports.
“In order to do so, Trump is leaning to a weak dollar policy by, for example, criticising Japan for adopting weak yen policy,” said Sakakibara, who has predicted the dollar would fall below 100 yen.
Japanese Prime Minister Shinzo Abe is expected to discuss trade when he meets Trump in the US at the weekend.
Hong Kong was marginally lower in the afternoon while Shanghai ended 0.1 percent down and Seoul gave back 0.1 percent. Wellington, Manila, Jakarta and Bangkok were all down but Singapore added 0.3 percent and Sydney gained 0.1 percent.
Dealers were given a sombre lead from Wall Street where energy firms were hit by falling oil prices, while European traders are increasingly worried about upcoming polls in Germany and France.
Two of Europe’s biggest economies hold general elections this year and there are fears they could succumb to the surge in populist parties that could threaten the break-up of the European Union.
Stephen Innes, senior trader at forex firm Oanda, said: “The market’s tone has been one of risk-off, as political fallout in both Europe and the United States is weighing on investor resolve, imposing an unpalatable risk on investor sentiment.”
European Central Bank boss Mario Draghi said Monday that “risks to the euro area outlook remain tilted to the downside and relate predominantly to global factors”, and he stood ready to further ease monetary policy if necessary. With AFP, Bloomberg
