Share prices lost steam after a six-day climb, shedding more than half of last week’s gain, with investors taking profit amid concerns the US trade war is pushing the US economy toward a recession.
Traders and analysts said the arrest of former President Rodrigo Duterte upon his return to the Philippines from Hong Kong in relation to the case filed against him before the International Criminal Court (ICC) made no significant impact on trading for the day.
The Philippine Stock Exchange index (PSEi) tumbled 154.22 points or 2.42 percent to 6,206.55.
The index at mid-trade lost nearly 200 points, but pared the losses before the closing bell.
The broader All Shares index dropped 64.33 points or 1.72 percent to 3,684.59.
Losers edged gainers 157 to 58, with 41 stocks unchanged. Trading turnover reached P7.71 billion.
The PSE joined regional peers which also dropped on concern that the war triggered by US President Donald Trump’s tariff measures could negatively impact economies, sending markets worldwide down. The MSCI EM stocks index retreated 6 percent for the day.
Reuters reported the prospect of an economic downturn drove a stock market sell-off in the US on Monday, with investors worldwide re-evaluating their bets on Trump’s policies, which no longer seem to be as market-friendly and pro-businesses as previously anticipated.
Luis Limlingan, managing director at Regina Capital and Development Corp., said selling was largely “fueled by investor worries that uncertainty surrounding tariff policies could lead the global economy into a recession.”
“Concerns about the US have been escalating over the past month and was amplified by recent comments from the White House. US began the trading week lower as tariff policy uncertainty fueled recession fears, with President Trump not ruling it out. Goldman Sachs cut its growth forecast, citing tariff risks,” he said.
Prior to the session’s midday break, the government reported that authorities have arrested Duterte upon his arrival from Hong Kong based on an arrest warrant issued by the ICC over charges of killings that happened during his tenure’s campaign against drugs in the Philippines.
April Tan, head of research at Colfinancial.com, however downplayed Duterte’s arrest as a factor in Tuesday’s decline.
“It’s the US market’s weak performance that’s a drag,” she said.
Seth Panga, trader at Diversified Securities Corp., said the arrest has long been expected as a tading factor.
“The ICC arrest is expected. I think this (drop) is the fear from US recession, with profit taking after six days of a market uptick,” he said.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp. (RCBC), warned, however, the “political noise” about the former president’s arrest might worsen to a more urgent degree in the event of any destabilization moves.
“There could be risk of political noise, (so, the stance is) still wait-and-see in the coming days/weeks… but that will remain as just noise for as long as there are no large protest rallies and no other forms of destabilization…,” he cautioned.
Most actively traded Ayala Land Inc. dropped P1.45 to P22.05. International Container Terminal Services Inc. slid P21 to P369. Bank of the Philippine Islands gained P0.90 to P132.80. BDO Unibank Inc. dropped P3.20 to P154.80. Jollibee Foods Corp. closed steady at P264. Manila Electric Co. tumbled P17 to P485. DigiPlus Interactive Corp. fell P1.10 to P36.40. Universal Robina Corp. closed lower by P3.25 to P71.75. SM Prime Holdings Inc. shed P1.50 to P23.50. JG Summit Holdings Inc. dropped P0.24 to P18.08. (With additional report from Reuters)
