The stock market declined again Wednesday as investors turned cautious while awaiting for an announcement from presumptive president Ferdinand Marco Jr. about his Cabinet economic team.
The Philippine Stock Exchange Index dropped 85.07 points, or 1.3 percent, to a near nine-month low of 6,635.86 on a value turnover of P6.6 billion. Losers beat gainers, 103 to 97, with 48 issues unchanged.
Ayala Corp. of the Ayala Group sank 4.9 percent to P704, while unit AC Energy Corp. fell 3.9 percent to P6.92.
Major property Ayala Land Inc. lost 2.9 percent at P30.60, but Bloomberry Resorts Corp., a casino operator owned by port tycoon Enrique Razon Jr., advanced 6.3 percent to P6.58.
The rest of Asian stocks were mixed on Wednesday, following a volatile day on Wall Street with investors concerned about surging inflation and see-sawing crude prices.
Equities have been on a roller coaster ride in recent weeks, fueled by worries about inflation, the Russian invasion of Ukraine, and the impact of China’s COVID-19 lockdowns on global supply chains.
Global investors were spooked by China’s sinking April exports―the lowest in almost two years―as well as data showing that its consumer inflation had risen at its quickest pace in nearly half a year.
Some are preparing for the worst.
“Equity investors are positioning for a recession; that pressure will remain acute until they see calming in rate volatility,” said Stephen Innes of SPI Asset Management.
“The market seems to be fighting too many things to find its footing… The unavoidable growth concerns related to China are leaving a colossal contagion footprint across a plethora of global assets.”
Millions across China―particularly in its economic engine Shanghai―have been under lockdown for weeks, while COVID restrictions have crept up in the capital Beijing.
The World Health Organization on Tuesday said Beijing’s zero-COVID strategy is not sustainable given the emergency of highly contagious variants of the coronavirus.
The strict policy has stopped up ports and factories, while inciting rare outrage from residents who have been forced to stay at home with no end in sight.
In New York, the Dow fell for the fourth straight day at Tuesday’s close, while the broader S&P 500 edged up. The Nasdaq jumped one percent.
Asian markets were also mixed Wednesday.
Tokyo and Sydney rose, but Seoul and Singapore dipped.
All eyes are now on the release Wednesday of the US consumer price index report for April.
Sentiment on trading floors has been buoyed by US President Joe Biden saying his administration is discussing lifting trade tariffs on China to try and control inflation.
“That has given US equity futures a leg up today,” Jeffrey Halley, senior market analyst at OANDA, said in a note on Wednesday.
“However, even if we may be nearing the top of inflation, that doesn’t mean it will suddenly drop.”
Crude continued to go on a ride, with WTI rebounding over the $100 dollar a barrel mark on Wednesday. With AFP
