Stocks retreated Wednesday, in line with the movement of Asian markets amid a selloff in technology shares and uncertainty over legislative and healthcare agenda in the US.
The Philippine Stock Exchange index, the 30-company benchmark, shed 19 points, or 0.2 percent, to close at 7,857.18, as four of the main six sectors declined.
The heavier index, representing all shares, dropped 7 points, or 0.2 percent, to settle at 4,697.20, on a value turnover of P6.6 billion. Losers outnumbered gainers, 104 to 88, while 50 issues were unchanged.
Seven of the 20 most active stocks ended in the green, led by retailer SSI Group Inc. which climbed 5.9 percent to P4.12 and casino operator Melco Resorts which rose 2.5 percent to P9.16. JG Summit Holdings Inc., the investment company of tycoon John Gokongwei, gained 1.6 percent to P80.25.
Meanwhile, most Asian markets also traded lower. Republicans’ struggle to push through controversial health care legislation fueled concerns about the chances of US President Donald Trump’s passing his much-vaunted economic agenda.
Global markets soared in the months after the tycoon’s November election victory as traders bet his plans to slash taxes and red tape while ramping up infrastructure spending would fire the world’s top economy.
But his failure to pass an overhaul of Obamacare”•a key campaign promise”•despite his party controlling Congress has led many to question his ability to deliver his major promises.
The president’s lack of detail on his economic plans led the International Monetary Fund to cut its 2017 and 2018 US growth projections.
“US lawmakers have withdrawn the Senate Health Care Bill till after the summer recess. This is a blow to the Trump agenda because it makes tax cuts all the more difficult,” said Greg McKenna, chief market strategist at AxiTrader.
All three main indexes on Wall Street ended sharply lower and the losses filtered through to Asia, with the technology sector taking a hit. Big-name giants including Seoul-listed Samsung, Japan’s Sony and Tencent in Hong Kong were all lower.
Tokyo’s Nikkei ended 0.5 percent lower, while Hong Kong lost 0.6 percent in the afternoon, Singapore gave up 0.1 percent and Seoul dropped 0.4 percent.
Wellington and Taipei also retreated but Sydney rose 0.7 percent.
Adding to the selling were concerns about another wave of global cyberattacks reminiscent of May’s WannaCry virus that crippled organizations and companies in 150 countries.
On currency markets the euro extended gains against the dollar after European Central Bank boss Mario Draghi said the EU was enjoying a newfound confidence that could unlock demand and investment.
And while he cautioned against winding down the bank’s easy money policy, analysts said the Italian was more hawkish than expected.
Stephen Innes, senior trader at OANDA, said in a note: “An emphatically hawkish Mario Draghi suggests the ECB policy is on track while all but declaring victory over the eurozone inflation conundrum. Apparently, the ECB has taken a giant leap towards ending [its] ultra-loose monetary policy.”
The euro surged more than one percent above $1.13 and on Wednesday it pushed to highs not seen since August. The single currency was also up about 1.4 percent against the yen at levels not seen since early 2016. With Bloomberg, AFP
