Market retreats; Bloomberry up

Stocks retreated Thursday, after the government announced a lower-than-expected first-quarter economic growth and regional markets sank over political controversies surrounding US President Donald Trump.

The Philippine Stock Exchange index, the 30-company benchmark, fell 68 points, or 0.9 percent, to close at 7,757.69, as all six major sectors declined.  

The heavier index, representing all shares, also dropped 26 points, or 0.6 percent, to settle at 4,626.42, on a value turnover of P7.5 billion.  Losers overwhelmed gainers, 124 to 74, while 51 issues were unchanged.

Only five of the 20 most active stocks ended in the green, led by Robinsons Retail Holdings Inc. which rose 1.9 percent to P83.65 and Bloomberry Resorts Corp. which gained 1.6 percent to P9.75.

Meanwhile, most Asian equities sank Thursday while the dollar held losses on fears the intensifying crisis surrounding Donald Trump could lead to his impeachment and shatter any chances of his economy-boosting agenda being implemented.

Investors tracked the heaviest losses in New York since Trump was elected, following claims by recently fired FBI boss James Comey that the president pressed him to drop a probe into ex-national security advisor Michael Flynn’s links to Moscow.

That came a day after it was reported Trump had divulged classified information to Russia’s foreign minister, fanning further allegations about his own tied to the country’s leaders.

While the tycoon says he will be exonerated by a newly appointed special prosecutor who will look into the claims, analysts said the uncertainty is rocking markets globally.

There is a growing fear that Trump’s plans for tax cuts, big spending and red-tape slashing—which had fueled a global equities and dollar rally his November election win—will be thrown off course.

“It’s all about President Trump this morning,” said Greg McKenna, chief market strategist at AxiTrader, said in a note.

“Impeaching Donald Trump was a pipe dream for the Democrats but extremely unlikely to most other observers until a few days ago,” he added. “As it drags on, it hurts sentiment and recently often threatens the administration’s agenda—especially around tax and infrastructure.”

Tokyo plunged 1.3 percent, while Hong Kong shed 0.5 percent in the afternoon, Sydney shed 0.8 percent, Seoul was 0.3 percent off and Singapore also gave up 0.3 percent. Shanghai lost 0.5 percent, Wellington 0.7 percent and Taipei 0.4 percent.

In early European trade, London dropped 0.3 percent and Paris was flat while Frankfurt gave up 0.1 percent.

“There is a very high level of uncertainty oozing from the markets but one thing that is crystal clear, investors now believe that at a minimum the rising US political entropy will jeopardise the White House policy agenda, and at the extreme, a Trump impeachment will lead to a flat out market collapse,” said Oanda senior trader Stephen Innes.

The uncertainty fanned a flight to safe assets, sending the yen and gold rallying, while the VIX gauge of volatility—also known as the fear index—soared almost 50 percent.

The dollar tumbled as dealers began to reconsider the chances of a Federal Reserve interest rate hike next month, which had been widely expected.

In Asian trade, the greenback sank below 111 yen for the first time since the end of April before edging back marginally, while the euro—itself buoyed by easing uncertainty in the EU and a pick-up in eurozone economic fortunes—continued to levels not seen since Trump’s election win. With Bloomberg, AFP

Topics: stock market , Philippine Stock Exchange , Philippine Stock Exchange index , PSE , PSEi , Bloomberry Resorts Corp.
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