Home / Business / Yuan drop, trade war drag PSEi to new low

Yuan drop, trade war drag PSEi to new low

August 06, 2019

THE stock market fell to its lowest level in more than two months on Monday, with analysts blaming it on the depreciation of the Chinese yuan and the trade war between the United States and China.

Yuan drop, trade war drag PSEi to new low 1

Traders work at the New York Stock Exchange (NYSE) on August 5, 2019 at Wall Street in New York City. Selling on Wall Street accelerated early Monday as a steep drop in the Chinese yuan escalated the US-China trade war following President Trump’s announcement of new tariffs last week. / AFP / Johannes EISELE

The benchmark Philippine Stock Exchange index (PSEi) dropped by 2.95 percent or 239.91 points to close at 7,890.02, a level it last touched on May 30. The wider All Shares declined by 2.14 percent or 105.45 points to finish at 4,821.11.

AAA Southeast Equities Inc. research head Christopher Mangun said the local market joined its Asian peers, with sentiment “destroyed” by a weaker yuan, which plunged to its lowest level in 10 years against the greenback.

This, he added, was worsened by the trade war between the world’s two leading economies after US President Donald Trump last week threatened to slap Chinese goods with an additional 10-percent of duties on top of the 25-percent tariff it already imposed this year.

P2P Trade Online sales associate Gabriel Jose Perez shared Mangun’s view, and said net foreign selling hit P1.2 billion as foreigners loaded P2.6 billion issues and disposed of P3.76 billion.

Jollibee Foods Corp. also contributed to Monday’s pessimism after the fastfood giant reported that its net income attributable to shareholders slid by 34.4 percent drop to P2.7 billion in the first six months of the year.

“With the index’s close of 7,890, we’re now in the vicinity of its support area at May 22’s breakout point of 7,838,” Perez said.

In the region, Tokyo declined by 1.74 percent, Shanghai fell by 1.62 percent, Hong Kong plunged by 2.85 percent, Seoul slid by 2.56 percent, Jakarta decreased by 2.38 percent, Singapore dropped by 1.99 percent, and Bangkok lost 0.95 percent.

On Friday, Wall Street’s main indices also finished in the red.

In Manila, most sectoral results were down, except for mining and oil, which gained 1.16 percent.

More than 946 million issues were traded, valued at P6.37 billion.

Losers led winners, 149 to 55, while 47 issues were unchanged.

Credit belongs to : www.manilatimes.net

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