PSE index falls on PMI data, US-China tensions

By Denise A. Valdez, Reporter

THE MAIN INDEX snapped its three-day climb on Monday due to record low manufacturing data in April and brewing tensions between the United States and China.

The bellwether Philippine Stock Exchange index (PSEi) gave up 128.62 points or 2.25% to close at 5,572.09 yesterday. The broader all shares index also shed 59.53 points or 1.72% to 3,386.30.

“Market’s drop of 2.26% was influenced by negative sentiment at home and from overseas,” Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a text message.

She noted the contraction in the country’s Purchasing Managers’ Index to 31.6 in April from 39.7 in March spooked investors on the economic slowdown brought by the coronavirus crisis.

US President Donald Trump’s remarks blaming China for the pandemic also sparked worries over the two countries’ renewed tensions after more than a year of trade war.

“Dismal (gross domestic product in the first quarter) is also anticipated by the investors, which (is) to be released on Thursday, so some exited the market this early,” Ms. Alviar added.

PNB Securities, Inc. President Manuel Antonio G. Lisbona also blamed the Sino-US tensions for the market’s decline on Monday, which moved in step with the rest of the region.

“Investors took money off the table today on concerns of a renewed trade war between the US and China. US President Trump threatened tariffs to punish or hold China accountable for the pandemic,” he said in a text message.

Other Asian markets also declined yesterday. Japan’s Nikkei 225 and Topix indices dropped 2.84% and 2.24% respectively, South Korea’s Kospi index fell 2.68%, and Taiwan’s FTSE TWSE Taiwan 50 Index lost 2.90%.

All sectoral indices at the local bourse closed in red territory. Holding firms went down 160.73 points or 2.89% to 5,383.56; industrials shaved off 175.16 points or 2.34% to 7,299.77; financials lost 24.63 points or 2.07% to 1,164.04; mining and oil erased 85.18 points or 1.80% to 4,623.39; property slid 47.95 points or 1.64% to 2,873.97; and services fell 22.17 points or 1.61% to 1,351.65.

Value turnover dropped to P5.11 billion from P6.58 billion in the previous session. Some 522.40 million issues switched hands yesterday.

Decliners totaled 150 to beat advancers which stood at 46. Some 34 names ended unchanged.

Investors offshore remained sellers for the 33^rd straight day. Net foreign selling yesterday was P509 million, down from the P658.39 million logged in the previous session.

“The main index hovered above 5,500 for most of the trading day as bargain hunters took advantage. Last-minute buying propelled it higher… We may see it bounce higher (today) unless investors lose more optimism overnight,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.