spot_img
27.6 C
Philippines
Friday, March 29, 2024

Market retreats; SPNEC, Figaro climb

- Advertisement -

Stocks fell Monday on profit taking and in step with the rest of Asia after another painful sell-off on Wall Street last week.

The Philippine Stock Exchange Index slipped 40.88 points, or 0.6 percent, to 7,252.64 on a value turnover of P6 billion. Losers overwhelmed gainers 127 to 62, with 48 issues unchanged.

Globe Telecom Inc., the second-biggest telecommunications firm, declined 1.8 percent to P3,260, while fiber broadband provider Converge ICT Solutions Inc. dropped 1.3 percent to P30.60

Solar Philippines Nueva Ecija Corp., which is building what is being touted as the biggest solar farm in Southeast Asia, however, surged 13.3 percent to P1.96, while Figaro Coffee Group Inc. rose 2.7 percent to P0.77 in its market debut.

Meanwhile, most markets sank in Asia, with investors’ focus on the Federal Reserve’s next policy meeting this week, where officials are expected to unveil their plans to battle soaring inflation.

- Advertisement -

The prospect of tighter policy has battered markets in recent weeks, with the Nasdaq in New York down about 15 percent from its recent peak—tech firms are considered more susceptible to higher rates. 

The S&P 500 is down more than eight percent from a record high touched at the start of the month, and observers said it could see even more losses in coming weeks.

The selling filtered through to Asia, with Mumbai 2.2 percent down as it extended losses into a fifth day, while Hong Kong, Seoul, Jakarta and Wellington were each down more than one percent.

There were also losses in Sydney, Singapore and Bangkok, but Tokyo, Shanghai and Taipei squeezed out gains.

Tech firms—which soared on the back of the pandemic—led the retreat in New York after weak subscriber figures from Netflix fueled concerns that the end of lockdowns and reopening of economies is seeing consumers changing their spending habits.

That comes as traders contemplate the end of the ultra-loose monetary policies put in place by central banks in early 2020 to cushion the impact of COVID-19 containment measures, with the Fed expected to start lifting interest rates from March.

Minutes from the Fed’s December gathering indicated officials were turning more hawkish as they grow increasingly concerned about inflation, which is sitting at a four-decade high.

Commentators have tipped the first increase in borrowing costs in March followed by another three hikes before the end of the year, while the central bank is also forecast to start running down its vast bond-holdings that have helped keep rates down.

Economists at Goldman Sachs said at the weekend they saw increases in March, June, September and December, with July as the start of the Fed’s balance sheet reduction but warned inflation pressures meant “risks are tilted somewhat to the upside of our baseline.”

They were also concerned the virus would continue to cause supply-demand imbalances while strong wage growth was also a worry, suggesting inflation would remain an ongoing problem.

“We see a risk that the (policy board) will want to take some tightening action at every meeting until that picture changes,” the economists said. “This raises the possibility of a hike or an earlier balance sheet announcement in May, and of more than four hikes this year.” With AFP

- Advertisement -

LATEST NEWS

Popular Articles