Philippine Market Recap Aug 29, 2018
Market Recap
Philippine share prices fell slightly as investors cashed in on gains from Tuesday’s rally and moved more cautiously as they took stock of the latest trade developments and possible headwinds.
The bellwether PSEi fell 13.65 points or 0.17% to 7,830.96 at the closing bell. The broader All Shares declined 8.27 points or 0.17% to 4,750.86.
A flat finish on Wall Street and a dearth of major economic data across the region pointed to a quiet session ahead.
Optimism over the US-Mexico trade deal was quickly replaced by caution ahead of a looming deadline on tariffs with China.
While the news was seen as a much-needed boost after Donald Trump threatened to tear up the North American Free Trade Agreement when he took office, there remain concerns about his tariffs row with China that has rattled markets for months.
Washington could soon also impose levies on $200-bil of Chinese goods, which would come on top of the $50-bil already being hit.
End-of-month flows could start to take hold into the end of the week, and combined with light news flow and the risk of impending trade war escalation could result in conviction remaining light.
Canada's main trade negotiator was in talks to preserve a three-nation North American Free Trade Agreement following Monday's deal between the United States and Mexico.
President Trump warned he could proceed with Mexico alone and levy tariffs on Canada if it does not come on board with the revised trade terms.
Yet even if Trump were to go with Mexico alone, Congress would have to approve the deal in a process that would take months and put it beyond the mid-term elections.
In a nutshell, it seems that many contentious issues remain unresolved and there is a very tight timeline that needs to followed if a NAFTA deal is to be ratified by the current US Congress.
The White House has also said it wants to settle NAFTA before dealing with China, suggesting that trade dispute could run well into 2019.
More than 3.035-bil shares valued at P6.206-bil, changed hands. Market breadth was negative, with decliners beating advancers, 81 to 112, and 51 issues were unchanged.
Gainers: FGEN (+6.10%), MPI (+3.16%), SMC (+2.95%), JGS (+2.16%), ALI (+1.82%)
Laggards: AEV (-2.78%), MER (-2.32%), SECB (-1.72%), AP (-1.35%), GTCAP (-1.16%)
