Stocks surge; Jollibee, Security Bank advance

The stock market rebounded Monday on bargain hunting in step with the rest of Asia, as traders brushed off another negative performance on Wall Street as US data showed fewer new jobs than expected were created last month.

The Philippine Stock Exchange Index jumped 129.56 points, or 1.8 percent to 7,140.67 on a value turnover of P5.2 billion. Gainers overwhelmed losers, 116 to 64, wit 53 issues unchanged.

Solar Philippine Nueva Ecija Corp., which is building what is being touted as the biggest solar farm in Southeast Asia, advanced 7.5 percent to P1.29, while Security Bank Corp., the eighth biggest lender in terms of assets, climbed 6.6 percent to P111.

SM Prime Holdings Inc. of the Sy Group rose 3.9 percent to P34.40, while Jollibee Foods Corp., the largest fast-food chain, gained 3.6 percent at P222.80

Most Asian and European markets rose Monday as US wages saw a strong gain, keeping pressure on the Federal Reserve in its battle against inflation.

Asia had an uncertain start but most were up.

Still, Hong Kong extended a recent winning streak into a third day, and Shanghai was also up.

Singapore continued its bright start to the year with another healthy gain while there were also advances in Taipei, Mumbai, Bangkok and Jakarta, though Sydney, Seoul and Wellington dipped. Tokyo was closed for a holiday.

Traders will be keeping a watch on inflation readings out of the United States and China this week as they try to assess the outlook for the global economy with rocketing energy costs and supply snarls compounding problems caused by the fast-spreading Omicron COVID variant.

The closely watched non-farm payrolls figure on Friday came in well short of forecasts, marking a disappointing end to the year, while wage growth beat estimates.

Fed officials are now faced with the problem of having to adjust monetary policy to rein in prices while at the same time avoid damaging the economic recovery and causing a panic on markets as the cheap cash that has fueled a near-two year rally is removed.

The bank has already started tapering its vast bond-buying program put in place at the start of the pandemic and has signaled it could start lifting interest rates from record lows from March, with some observers predicting three hikes this year. With AFP

There were also indications officials were considering reducing its massive bond holdings, putting further upward pressure on lending costs.

The yield on 10-year Treasuries, a key indicator of future interest rates, climbed last week at its fastest pace in almost a year.

“The US Fed needs to tread carefully in removing policy accommodation—it should not happen too fast otherwise it risks a disruption to the rebound in economic growth and could lead to another ‘taper tantrum’,” Diana Mousina, of AMP Capital, said.

She added that she saw inflation causing further upheaval in markets this year, while US elections in November and geopolitical issues would also play a role.

Meanwhile, the International Monetary Fund warned Monday that emerging economies should prepare for possible rough times as the Fed prepares to hike rates and COVID hits global growth. With AFP