Stocks retreated Monday on profit taking, while the rest of Asian markets fluctuated as a forecast-busting US jobs report reinforced optimism that the world’s top economy was well on the recovery track, but also ramped up expectations of an interest rate hike.
The Philippine Stock Exchange Index dropped 76.05 points, or 1 percent, to 7,380.30 on a value turnover of P9.2 billion. Losers beat gainers, 105 to 84, with 51 issues unchanged.
Noodles maker Monde Nissin Corp. fell 2.9 percent to P15.60, while SM Investments Corp. of the Sy Group declined 2.7 percent to P950.
Solar Philippines Nueva Ecija Corp., which is building the the biggest solar farm in Southeast Asia, however, rose 6.8 percent to P2.20, while Security Bank Corp., the eighth-largest lender in terms of assets, climbed 2.7 percent to P117.80.
Asia, meanwhile, was mixed. Shanghai led the gainers as investors returned from their week-long Lunar New Year break to play catch-up with a broadly strong week across world markets, while Singapore, Taipei, Bangkok and Jakarta were also in positive territory.
Hong Kong finished marginally higher thanks to a late-afternoon rally from negative territory, following a three-percent surge Friday.
Tokyo, Seoul and Mumbai closed down.
Sydney was also in the red despite news that Australia will open its borders to tourists this month, ending almost two years of tough restrictions. The announcement helped Qantas surge more than four percent.
The much-anticipated US non-farm payrolls data on Friday, meanwhile, saw the Labor Department sharply revise up the previous three months’ readings, while also revealing a wage growth surge.
With all-important reports this week tipped to show inflation rising at a pace not seen for four decades, traders are becoming increasingly anguished about the US central bank’s plans to bring prices under control while being careful not to jeopardize the recovery.
There is mounting talk that officials will have to hike borrowing costs at least four times this year—with some predicting as many as seven rises could be on the cards.
The move to tighter policies, which is likely to start in March, will bring an end to the era of ultra-cheap cash that has helped fuel a near two-year markets rally. And that has been acting as a hefty weight on stocks at the start of the year.
The Federal Reserve is in a difficult spot, “trying to manage the real economy where we see that hot inflation and the financial economy, which quivers every time we talk about rate rises,” Karen Harris, of Bain & Co, told Bloomberg Television.
With the jobs reading showing the economy remained resilient in the face of the Omicron coronavirus variant, supply chain snarls and surging prices, Wall Street mostly rose, helped by a thumping rise in Amazon.
The S&P 500 and Nasdaq closed on a positive note, though the Dow dipped.
Oil edged down after another surge, but expectations demand will continue to improve as the world economy reopens is supporting prices, with a cold snap in the United States and ongoing uncertainty over the Russia-Ukraine stand-off feeding expectations to the upside. With AFP