PHILIPPINE STOCKS could decline this week due to the growing trade war between the United States and China.
On Wednesday, the Philippine Stock Exchange index (PSEi) fell by 0.83% or 51.48 points to close at 6,134.62, while the broader all shares index rose by 0.28% or 10.34 points to 3,656.99.
Week on week, the PSEi went up by 0.86% or 52.18 points from its 6,082.44 finish on April 11.
The market was closed on April 17-18 in observance of Maundy Thursday and Good Friday.
“Steady movement above the 6,000 zone characterized the shortened trading week amid quiet activity ahead of the Lenten break,” online brokerage 2TradeAsia.com said in a market note.
For this week, First Metro Investment Corp. Head of Research Cristina S. Ulang said volatility may welcome back investors from the trading break following the latest developments in the US-China trade war.
“Downside risks lurk as the market digests the adverse trade and economic growth fallout for emerging markets following the fresh port container fees recently slapped by US President Donald J. Trump on Chinese exports,” Ms. Ulang said in a Viber message.
The Trump administration shielded on Thursday domestic exporters and vessel owners servicing the Great Lakes, the Caribbean and US territories from port fees to be levied on China-built vessels, aiming to revive US shipbuilding, Reuters reported.
The Federal Register notice posted by the US Trade Representative was watered down from a February proposal for fees on China-built ships of up to $1.5 million per port call that sent a chill through the global shipping industry.
Still, the fees on Chinese-built ships add another irritant to swiftly rising trade tensions between the world’s two largest economies as Mr. Trump seeks to draw China into talks on his new tariffs of 145% on many of its goods.
The revisions tackle major concerns voiced in a tsunami of opposition from the global maritime industry, including domestic port and vessel operators as well as US shippers of everything from coal and corn to bananas and cement.
Unicapital Securities, Inc. Research Head Wendy B. Estacio-Cruz said in a Viber message that the PSEi is expected to trade within the 5,800 to 6,300 range this week.
For his part, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in an e-mail that the market’s support is pegged at 6,000, while resistance could be at 6,230-6,490.
2TradeAsia.com placed the PSEi’s support at 6,000 and resistance at 6,400.
“A global backdrop of rate path uncertainty, persistent push-pull forces in tariffs and trade policy, and sticky real yields continue to weigh on valuations despite a relatively benign domestic inflation setup,” it said. — Revin Mikhael D. Ochavewith Reuters
