Stock market slumps; SM Prime leads losers



The stock market tumbled Friday on profit-taking, following a signal from the rest of Asia where investors struggled to take the lead from a record performance on Wall Street.

The Philippine Stock Exchange Index slumped 116.64 points, or 1.8 percent, to 6,370.87 on a value turnover of P8.6 billion. Losers beat gainers, 110 to 91, with 47 issues unchanged.

SM Prime Holdings Inc. of the Sy Group, the biggest operator of shopping malls, fell 4 percent to P34.45, while JG Summit Holdings Inc. of the Gokongwei Group also declined 4 percent to P52.75.

Globe Telecom Inc., the second-largest telecommunications firm, dropped 2.8 percent to P1,833, but Philippine National Bank, the sixth-biggest lender in terms of assets, rose 8.5 percent to P31.15.

The rest of Asian markets turned lower Friday following below-forecast Chinese factory data.

News that US growth had accelerated more than six percent in the first quarter and jobless claims continued to fall to new pandemic-era lows reinforced the view that the recovery in the world’s top economy was well on track.

That came after the head of the Federal Reserve had reiterated the bank’s commitment to keeping monetary policy ultra-loose until it is satisfied the economy is strong enough.

In response the S&P 500 hit another record, helped by a string of outsized earnings from tech heavyweights including Apple, Facebook and Google.

But after a broadly upbeat week, Asia was unable to build on the positive run, with most markets in negative territory.

Hong Kong led the losses, shedding two percent, with tech firms including JD.com, Meituan and Tencent taking a hit after China ramped up its crackdown on the sector by summoning 13 companies to call for changes to their fintech operations. Shanghai also fell.

The group was told to heed the case of ecommerce titan Alibaba, which was hit with a record $2.78-billion fine by regulators for abusing its dominant market position.

Adding to the selling pressure was a report showing slowing growth in China’s factory activity owing to a global shortage of shipping containers, supply chain problems, and rising freight rates.  

There were also losses in Tokyo, Sydney, Seoul, Mumbai, and Jakarta, though Singapore and Wellington edged up.

“The recovery in Asia remains on track, as it does in the US, but is uneven,” said OANDA’s Stephen Innes. “COVID-19 remains a threat in Asia. Logistical bottlenecks, and semi-conductor shortages, are now a global issue, making their presence felt everywhere.

“That may mollify the pace of global recovery in developed countries but will not derail it. The unintended side effect will be a rise in prices and thus inflation.” 

Still, observers remain upbeat about the outlook as vaccinations pick up and lockdowns are eased, while vast sums of government and central bank cash swirl around the economy.

“All evidence still points to continued support from both fiscal and monetary policy against a backdrop of accelerating corporate earnings,” Mark Haefele, at UBS Global Wealth Management, said. With AFP

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