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Friday, March 29, 2024

Stock market retreats; PLDT, URC lead losers

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Stocks retreated Friday on mild profit taking as traders assess the impact of the war in Ukraine and the Federal Reserve’s plans to fight surging inflation by ramping up interest rates.

The Philippine Stock Exchange Index slipped 50.59 points, or 0.7 percent, to 7,152.88 on a value turnover of P5.4 billion. Losers beat gainers, 106 to 65, with 46 issues unchanged.

PLDT Inc. of the Salim Group, the biggest telecommunications firm, fell 3 percent to P1,795, while Universal Robina Corp. of the Gokongwei Group, the largest snack food maker, declined 1.4 percent to P119.30.

SM Investments Corp. of the Sy Group dropped 1.2 percent to P898, but International Container Terminal Services Inc., the biggest port operator and owned by tycoon Enrique Razon Jr., added 0.8 percent to P226.60

The rest of Asian equities were mixed Friday after their worst quarter since the early days of the pandemic.

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And oil extended a sell-off following Thursday’s plunge in response to news that the United States would release a million barrels a day from its reserves as it looks to rein in a price rally fueled by Russia’s conflict.

All three main indexes on Wall Street finished more than one percent down but Asia ended mixed after a poor start.

Tokyo, Sydney, Seoul, Taipei and Wellington were all down but Hong Kong finished higher thanks to a late rally while Shanghai, Mumbai, Singapore, Jakarta and Bangkok were also up.

Investors suffered a torrid first three months, with markets across the planet first plunged into turmoil over central bank moves to tighten policy and reel in their COVID-era financial support measures, and then by Russian President Vladimir Putin’s invasion of Ukraine.

Inflation had already rocketed to multi-decade highs in several countries before the war in eastern Europe exacerbated the problem as crucial crude supplies from Russia were slashed and sent its price to six-year highs above $100.

The developments came as profit-takers cashed out after a near two-year rally fueled by central bank and government largesse.

Despite a pick-up in recent weeks, most indexes finished the quarter in the red.

Traders are struggling to ascertain the outlook for the next three months, with the war showing no signs of ending and the Federal Reserve just getting started on its campaign of sharp rate hikes.

The second quarter of 2022 “is going to start as messily as the first quarter has finished, with markets buffeted by a multitude of strong winds from various directions, with the outcome no clearer for the future than ever,” said OANDA’s Jeffrey Halley.

And Anwiti Bahuguna, at Columbia Threadneedle Investments, told Bloomberg Television that a lowering of growth forecasts for the United States, Europe, and China are “something to watch very carefully.”

The upcoming earnings season will be closely watched to see what impact higher inflation and the war has had on firms’ bottom line and their forecasts for the year ahead.

The release of US jobs data later in the day will be closely followed for an idea about the state of the world’s top economy. With AFP

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