Bargain hunting lifts stocks; BPI, BDO gain


Stocks rose Friday on bargain hunting as the Philippines awaits the arrival of the  first batch of COVID-19 vaccines Sunday from China’s Sinovac.

The Philippine Stock Exchange Index added 38.91 points, or 0.6 percent, to 6,794.86 on a value turnover of P13.7 billion. Gainers beat losers, 121 to 96, with 42 issues unchanged.

Bank of the Philippine Islands, the third-biggest lender in terms of assets, climbed 5.8 percent to P89, while BDO Unibank Inc., the biggest bank, advanced 2.2 percent to P105.50.

JG Summit Holdings Inc. of the Gokongwei Group increased 3.8 percent to P64.45, while SM Prime Holdings Inc. of the Sy Group rose 3.3 percent to P36.15.

Meanwhile, the rest of Asian equity markets were pummeled Friday, on growing fears that an expected strong global economic recovery this year will fan inflation and force central banks to hike interest rates, despite reassurances that ultra-loose monetary policies will be kept in place for as long as needed.

The rollout of vaccines, slowing of infections and Joe Biden’s impending huge US stimulus are proving to be a double-edged sword for traders as they weigh the much-needed return to pre-pandemic life with the prospect that prices will soar.

And there is a worry this would threaten one of the key pillars of the rally on world markets from their March nadir—record-low borrowing costs and a vast bond-buying program.

Alarm bells have been ringing for weeks as the yield on benchmark 10-year US Treasuries climbed to one-year highs as investors moved out of the safe havens—yields rise as prices fall—and on Thursday a better-than-expected read on US jobless claims pushed them up further.

Yields have also advanced in other parts of the world, including Australia, France and Germany, New Zealand and even Japan, which has struggled for decades to fire inflation.

That sparked a hefty sell-off in New York as all three main indexes tanked—led by the Nasdaq’s 3.5 percent plunge as tech firms are more susceptible to higher interest rates.

And Asia followed suit, suffering one of its worst sessions since the dark days of last March’s collapse.

Tokyo led the way, tanking four percent, while Hong Kong, Mumbai and Taipei were more than three percent off and Seoul shed 2.8 percent. Sydney and Shanghai also lost more than two percent while Singapore gave back more than one percent and Jakarta slipped 0.8 percent.

“Markets have become myopically fixated on inflation,” said OANDA’s Jeffrey Halley. “The expectations being that we will see an explosion in demand as vaccines reopen developed market economies. The fact is, data has shown we have seen an increase in demand anyway up till now, despite the pandemic walls erected globally.”

The selling comes despite constant reassurances from Federal Reserve officials, led by boss Jerome Powell, that they are not worried about inflation and the rise in Treasury yields is a sign that the economic outlook is bright—and rates will not rise for the foreseeable future. With AFP

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