Stocks tumbled Wednesday, after US equities dropped the most since November’s presidential election amid concern that President Donald Trump’s growth policies won’t pass Congress.
The Philippine Stock Exchange index, the 30-company benchmark, fell 68 points, or 0.9 percent, to close at 7,254.93, as all six sectors ended in the red.
The heavier index, representing all shares, also dropped 36 points, or 0.8 percent, to settle at 4,369.03, on a value turnover of P7.7 billion. Losers outnumbered gainers, 127 to 57, while 52 issues were unchanged.
Three of the 20 most active stocks ended in the green, led by Security Bank Corp. which rose 1 percent to P203. Food manufacturer Universal Robina Corp. gained 0.7 percent to P164, while conglomerate Ayala Corp. went up 0.5 percent to P832.
Meanwhile, most Asian markets also fell Wednesday, tracking a US and European sell-off as the Trump-fuelled surge in equities went into reverse on fears about the prospects for his plans to fire up the world’s top economy.
The dollar also struggled to recover against its major rivals and suffered fresh losses against high-yielding units as the euphoria of the post-election period faded.
After hitting multiple records this month, Wall Street’s main indexes suffered their worst losses since Donald Trump’s win, dragging Europe down with them, as dealers fret about his agenda.
The key cause for concern is Thursday’s vote in Congress on the replacement for Obamacare, with many Republicans opposed to it in its current form.
Analysts say the inexperienced Trump is spending too much political capital on the issue, and if he cannot push it through a Republican-controlled Capitol Hill, then his other plans—particularly infrastructure spending, tax cuts and deregulation—could be in trouble. Such promises were a key factor in the global markets rally.
The president travelled up Pennsylvania Avenue Tuesday to warn the party it could lose its majority if it fails to push through his bill.
“There is an ugly sea of red across global markets this morning as traders finally succumb to their fears that the positive benefits of Trumponomics are going to be delayed,” Greg McKenna, chief market strategist at AxiTrader, said in a note.
“The impact of this is that the tax and infrastructure policy and implementation the market has been aching for looks set to be delayed. This is a sign that investors are losing faith in Trumponomics.”
Tokyo ended more than two percent lower as the dollar sank to its lowest level against the yen since November, while Hong Kong shed 1.4 percent in the afternoon and Shanghai closed down 0.5 percent.
Sydney was 1.6 percent lower, Singapore shed 1.2 percent and Seoul slipped 0.5 percent. Wellington, Taipei, Manila and Jakarta also suffered hefty losses.
With expectations of economy-friendly measures petering out, the dollar has taken a severe hit. It extended Tuesday’s losses against the yen but held its ground against the pound and euro.
However, the South Korean won jumped 0.3 percent, Australia’s dollar rallied 0.9 percent and the Indonesian rupiah was 0.2 percent higher. The Mexican peso, which after Trump’s win hit regular record lows, was more than one percent up.
“The dollar positions accumulated in the buildup and immediate aftermath of the US election look to have been fully unwound,” Bank of America strategists led by Myria Kyriacou wrote in a research note, according to Bloomberg News. With AFP, Bloomberg
