PSEi halts three-day rally on trade war concerns

The Philippine stock index dropped on Tuesday, ending a three-day rally, as trade war concerns weighed on the market.

The Philippine Stock Exchange index (PSEi) fell by 0.34% or 21.51 points to end at 6,284.68 on Tuesday. Meanwhile, the broader all shares index inched up by 0.27 point to 3,723.09.

“Philippine shares gave up some gains after trading in the green recently driven by tariff uncertainties and weak consumer confidence, with retail sales in the United States rising 0.2%, below forecasts,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Markets remain volatile amid US President Donald J. Trump’s shifting trade policies and Elon Musk’s cost-cutting moves, while officials brace for economic turbulence to push reforms,” he added.

US retail sales rebounded marginally in February, but fell short of expectations, reflecting the increasing uncertainty over tariffs and large-scale firing of federal government employees, Reuters reported.

Mr. Trump’s tariff hikes will drag down growth in Canada, Mexico and the United States while driving up inflation, the Organization for Economic Cooperation and Development forecast on Monday.

Global growth is on course to slow slightly from 3.2% in 2024 to 3.1% in 2025 and 3% in 2026, the Paris-based policy forum said, cutting its projections from 3.3% for both this year and next in its previous economic outlook, issued in December.

Mr. Trump, speaking aboard Air Force One on route to Washington, also repeated he had no plans to create exemptions for the 25% steel and aluminum tariffs that went into effect last week.

“The PSEi corrected slightly lower, considered a healthy correction after gaining for three straight trading days… after recent reports of upcoming share sales that could increase supply of stocks and could also cause some fund shifts from existing stocks towards these new stock offerings,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

Majority of sectoral indices closed lower on Tuesday. Services dropped by 0.68% or 14.22 points to 2,070.54; financials went down by 0.41% or 10.04 points to 2,418.42; industrials declined by 0.22% or 19.82 points to 8,702.65; and holding firms inched down by 0.21% or 10.98 points to 5,221.16.

Meanwhile, mining and oil went up by 2.63% or 234.42 points to 9,116.90 and property climbed by 0.66% or 14.65 points to 2,230.79.

Value turnover increased to PHP 8.47 billion on Tuesday with 1.30 billion shares traded from the PHP 5.26 billion with 1.33 billion issues exchanged on Monday.

Advancers beat decliners, 100 versus 92, while 44 names were unchanged.

Net foreign buying declined to P337.16 million on Tuesday from the P357.25 million on Monday. — Revin Mikhael D. Ochave with Reuters