PSEi tumbles to four-month low on tariff threats

Philippine shares plummeted on Tuesday, with the benchmark index falling to the 6,100 level and hitting a four-month low, following US President Donald J. Trump’s latest tariff threats. 

The bellwether Philippine Stock Exchange index (PSEi) fell by 2.17% or 136.34 points to close at 6,145.24, while the broader all shares index dropped by 1.41% or 53.03 points to end at 3,684.55.

This was the PSEi’s worst close in over four months or since it finished at 6,138 on April 21.

“The local market started the week on a negative tone as the US’ latest tariff threats weighed on sentiment. US President Donald Trump warned of significant tariffs against China if the country would not export rare earth magnets to the US,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“The US President also warned of additional tariffs to countries that would not remove taxes and other measures on digital services,” he added.

On Monday, Mr. Trump said China had to give the United States rare earth magnets or “we have to charge them 200% tariff or something,” Reuters reported.

Senior Chinese trade negotiator Li Chenggang is expected to travel to Washington this week to meet US officials, a United States government spokesperson said, with the two superpowers looking to chart a path beyond their current truce.

Mr. Trump also threatened countries that have digital taxes with “subsequent additional tariffs” on their goods if those nations do not remove such legislation.

“The market saw a decline today as most stocks were weighed down by heavy selling pressure,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Investors are positioning ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy rate decision this week, with all eyes on how the stock market will react once the central bank’s move is confirmed,” he added. The BSP is widely expected to deliver a third straight 25-basis-point cut at the Monetary Board’s policy meeting on Thursday.

Almost all sectoral indices closed lower on Tuesday. Services fell by 5.46% or 124.49 points to 2,151.69; financials sank by 3.02% or 64.05 points to 2,052.40; holding firms went down by 0.41% or 21.67 points to 5,183.79; property declined by 0.26% or 6.43 points to 2,438.03; and industrials retreated by 0.1% or 9.75 points to 9,103.17. 

Meanwhile, mining and oil rose by 1.04% or 99.50 points to 9,588.74. 

“Ayala Land, Inc. was the top index gainer for the day, jumping 5.17% to PHP 28.50. BDO Unibank, Inc. was the worst index performer, plunging 7.99% to PHP 131.20,” Mr. Tantiangco said.

Value turnover jumped to PHP 14.32 billion on Tuesday with 1.55 billion shares traded from the PHP 6.44 billion with 803.64 million shares exchanged on Friday.

Decliners outnumbered advancers, 112 versus 81, while 64 names were unchanged.

Net foreign selling swelled to PHP 2.04 billion on Tuesday from PHP 721.91 million on Friday. — Revin Mikhael D. Ochave with Reuters