Market extends losses; PLDT rises

Stocks fell for a third day, as concerns over tensions on the Korean peninsula kept investors in Asia on edge. 

The Philippine Stock Exchange index, the 30-company benchmark, shed 19 points, or 0.3 percent, to close at 7,966.25 Thursday, as three of the six major sectors declined.

The heavier index, representing all shares, also lost 14 points, or 0.3 percent, to settle at 4,708.56, on a value turnover of P5.2 billion.  Losers outnumbered gainers, 111 to 84, while 52 issues were unchanged.

Eight of the 20 most active stocks ended in the green, led by PLDT Inc. which jumped 4.4 percent to P1,707, after reporting that net income soared 134 percent in the second quarter from a year ago.

Property developer Cebu Landmasters Inc. gained 2.1 percent to P4.90, while Security Bank Corp. rose 1.3 percent to P245.

Meanwhile, equity measures from Hong Kong to Tokyo to Sydney dropped and US index futures declined, as the won led emerging-market currencies lower. Stock volatility increased and the yen climbed. 

Other haven assets held near levels from the close on Wednesday, when comments by US government officials helped ease concern the country was headed for armed conflict with North Korea. 

South Korea’s military warned Pyongyang on Thursday that it would face a strong response if it carried through with a threat to launch a missile toward the US territory of Guam. European equity futures and the euro dropped.

“The North Korea situation is still unstable and investors are controlling risk and taking profit after recent gains,” said Sam Chi Yung, a Hong Kong-based senior strategist at South  China Financial Holdings Ltd.

Geopolitical tensions may be the trigger for the latest bout of risk aversion, but with global equities trading near record highs and yield premiums on high-yield debt creeping up, some of the biggest names in the asset management industry have already been warning that it’s time to take risk off the table. 

Markets had taken heart from reassuring words from the US Secretary of State Rex Tillerson seeking to play down the escalating war of words between Washington and Pyongyang.

European bourses also sank in early trade Thursday, after the Dow recorded its second straight negative close Wednesday.

The sabre-rattling—sparked when President Donald Trump stunned the world with an apocalyptic warning to unleash “fire and fury” on North Korea—continued Thursday as Pyongyang mocked the US leader as “bereft of reason”.

The reclusive state raised the stakes further with a detailed plan to send a salvo of missiles towards the US territory of Guam.

Markets had stabilised earlier as Tillerson sought to play down tensions, saying “there is any imminent threat” to Guam, and expressed hope for diplomacy would prevail.

However, the classic safe-haven asset gold rose again Thursday to around $1,278 an ounce after surging 1.3 percent Wednesday as investors reacted with dismay to the deepening crisis.

“Tensions are high. Markets have taken a little notice,” said Greg McKenna, an analyst at AxiTrader. With Bloomberg, AFP

Topics: stock market , Philippine Stock Exchange , Philippine Stock Exchange index , PSE , PSEi , PLDT Inc.
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