The Philippine Stock Exchange index (PSEi) was affected on Monday by the failure of the US Health Care reform. The unsuccessful reform in health was due to the last-minute decision of the US House of Representatives' Republican leaders to abandon a bill to replace the Affordable Care Act. Read on to learn more about the latest PSEi news update.
Here are three fast facts about the effects of the unsuccessful US Health Care reform on local stocks:
1. The PSEi went down by 0.32 percent to close at 7,245.97 on Monday.
The PSEI was down by 23.65 points on Monday, which analysts say is a reaction to what's happening in foreign markets, particularly the recent decision about the Affordable Care Act.
"Following the cancellation of the House vote on the health bill, Congress is likely to turn its attention to the Supreme Court nomination and budgetary issues," BusinessWorld Online reported Luis Limlingan, Regina Capital Development Corp business development head, as saying. "Preliminary discussions on tax reform could begin soon but we do not expect legislative action on tax reform until June," he added.
2. The PSE All Shares index dipped 0.15 points, finishing at 4,370.
The broader PSE All Shares index dropped 6.74 percent to finish at 4,370, according to a report from The Philippine Star. The total value turnover reached P7.77 billion, with 81 advancing stocks, 90 decliners and 51 unchanged issues.
3. The movement of the Philippine stock market extends from last week's performance.
According to 2Trade-Asia.com’s research team, the local stock market's movement at the start of the week was dragged by Wall Street's descent. This is believed to be caused by the increasing doubts on whether or not US President Donald Trump's agenda will actually be supported by its legislative body.
Citigroup also said in a research note that the US House of Representatives' failure to support the AHCA (American Healthcare Act of 2017) caused the new administration to shift to comprehensive tax reform. It added that even though the market's initial reaction could be negative for reflation trades, it appears likely that there will be another period of tracking Washington developments closely.
"Although tax reform appears to have broader support and may be easier to pass, the AHCA experience sends investors a cautionary message about opposing factions within the GOP (Grand Old Party/Republican) caucus, especially with key details – especially around the implementation of border tax adjustments – still not having found support from the consensus," Citigroup added.
What do you think of local stocks tanking after the unsuccessful US Health Care reform? Let us know your thoughts in the comments section below.