Market slumps; Meralco advances
The stock market tumbled Monday after investors continued to cash in on recent gains, while the rest of Asian equities fell after a recent rally to multi-year highs.
The Philippine Stock Exchange Index dropped 103.46 points, or 1.2 percent, to 8,330.02 on a value turnover of P8.2 billion. Losers overwhelmed gainers, 115 to 72, with 49 issues unchanged.
Major property developer Ayala Land Inc. lost 3 percent to P42.50, while Semirara Mining and Power Corp. slumped 3.1 percent to P37.10.
Bloomberry Resorts Corp., which operates a casino on a reclaimed part of Manila Bay, fell 3.5 percent to P10.50. Manila Electric Co., the biggest electricity retailer, however, advanced 3.7 percent to P305.80 to buck the trend.
The pound, meanwhile, sank against its major peers on Monday as British Prime Minister Theresa May’s future looks increasingly uncertain.
Global stock markets have surged in recent weeks—with Wall Street hitting several records and Tokyo touching 26-year highs—on optimism about the global economy and a series of strong corporate earnings.
But investors have started to cash in as worries begin to emerge about high share valuations, while there are also fears about Donald Trump’s much-vaunted tax cuts as US lawmakers struggle to agree a deal.
Sterling tumbled Monday after reports that dozens of MPs in the ruling Conservative Party were backing a move to oust May, whose leadership has been battered by a string of scandals and crises.
The questions over the prime minister’s future come as her government’s handling of Brexit talks with the European Union attract criticism from all sides.
On equity markets Tokyo’s Nikkei ended down 1.3 percent, while Seoul shed 0.5 percent.
Sydney lost 0.1 percent on worries about the ruling coalition’s future after Prime Minister Malcolm Turnbull lost his majority when another of his MPs resigned at the weekend, the latest victim of a constitutional crisis over politicians who hold dual citizenship.
There were also losses in Bangkok and Taipei but Hong Kong rose 0.3 percent in the afternoon, while Shanghai ended 0.4 percent higher.
Dealers are keeping a close watch on Capitol Hill, where US lawmakers are trying to cobble together a bill to reform the tax system.
However, Trump’s Republican party is divided, with senators calling for a one-year delay to corporate tax cuts, among other things. Fears over the possible delay sent the Dow lower in New York on Friday, ending eight weeks of gains.
The split has fueled fears the tax cuts—the promise of which have triggered a global markets rally—could fail in the same way as the planned overhaul of Obamacare earlier in the year. With AFP
“US wrangling over the tax plan continues and it’s starting to look a lot like the Obamacare mess and own goal the (Republican party) scored on itself,” said Greg McKenna, chief market strategist at AxiTrader.
“The administration is trying to put a brave face on it, Treasury Secretary Steve Mnuchin is still pushing and cheerleading for a vote before Christmas. But it seems the House and Senate bills have irreconcilable differences.” With AFP