Stocks drop; JG Summit, Globe slip


The stock market fell Thursday on profit taking and rising COVID-19 cases in the country, after some areas in Metro Manila resorted to granular lockdowns to contain the infection.

The Philippine Stock Exchange Index dropped 89.14 points, 1.3 percent, to 6,719.18 on a value turnover of P8.6 billion. Gainers, however, beat losers, 120 to 112, with 39 issues unchanged.

JG Summit Holdings Inc. of the Gokongwei Group declined 3.4 percent to P62.70, while SM Investments Corp. of the Sy Group was down 2.6 percent to P1,030.

Globe Telecom Inc., the second-biggest mobile phone company, shed 2.5 percent to P1,968, but DITO CME Holdings Inc., the third major telecommunications firm, rallied 16.7 percent to P10.50.

The rest of Asian and European markets ticked higher Thursday as inflation concerns eased, allowing investors to focus on the global recovery and progress in fighting the coronavirus pandemic.

Investors were given a positive lead from Wall Street, where the Dow ended at a new record, helped by news that Joe Biden’s stimulus had cleared its last hurdle in Congress, as expected, meaning he can sign it into law before the weekend, pumping almost $2 trillion into the economy.

Asian markets were positive Thursday, taking their lead from Wall Street, as well as a third straight record in Frankfurt and a one-year high for Paris.

Hong Kong rose more than one percent with Taipei, Shanghai jumped more than two percent and Seoul 1.9 percent. Tokyo, Singapore, Wellington and Bangkok also rose, while Sydney was barely moved.

Hopes for an improvement in China-US relations were also given a lift by news that top Washington and Beijing officials will meet for their first talks next week.

Fears that a strong rebound in world growth this year will cause a surge in inflation that forces the Federal Reserve and other central banks to wind back their ultra-loose monetary policies—including record-low interest rates—have fueled a sell-off across risk assets in recent months.

But data Wednesday showing US prices rose slightly less than expected in February soothed those concerns, with the main diver of the increases being food and energy costs.

That came as a closely watched auction of benchmark US 10-year Treasuries went off without any problems with the notes selling at a yield broadly in line with expectations.

Worries about a surge in inflation have lifted US yields to around one-year highs, while a weak sale of seven-year bonds sparked a stock market sell-off. Yields rise as prices fall.

“For now there is nothing for the inflationistas to ring the alarm, while at the same time it provides the Fed plenty of breathing space” ahead of its meeting next week, said National Australia Bank’s Rodrigo Catril.

The inflation data “suggests the music will keep playing for some time, with the Fed not even close to pondering the option of watering down the punchbowl.”

He said the consumer price index will naturally jump next month owing to the low base effect from last year. With AFP

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