Market rises slightly; PLDT climbs

Share prices rose slightly Wednesday on select buying despite a spike in local COVID-19 cases and with some investors staying on the sidelines.

The Philippine Stock Exchange Index added 18.10 points, or 0.3 percent, to 6,285.50 on a value turnover of P8.7 billion. Losers, however, beat gainers, 106 to 82, with 44 issues unchanged.

Cement maker Holcim Philippines Inc. advanced 6 percent to P6.55, while PLDT Inc., the biggest telecommunications firm, climbed 3.9 percent to P1,348.

SM Investments Corp. of the Sy Group increased 2.8 percent to P975.50, but unit BDO Unibank Inc., the largest lender in terms of assets, declined 2.4 percent to P95.60.

The rest of Asian markets, meanwhile, were mixed Wednesday following the previous day’s sharp drop, with optimism about the reopening of economies clouded by concerns about fresh spikes in infections around the world.

A string of positive indicators from China to the US in recent weeks”•as well hopes for a vaccine and the easing of lockdowns around the world”•has added fuel to a global rally that has lifted equities out of the March depths.

But while investors are generally upbeat that the world economy will recover from an expected recession this year, the ongoing spread of coronavirus continues to act as the terrifying backdrop that keeps them in check.

Adding to the unease are ongoing tensions between China, the US and several other nations over Beijing’s imposition of a security law in Hong Kong.

And Raphael Bostic, the president of the Federal Reserve Bank of Atlanta, fanned concerns about the US rebound by warning in a Financial Times interview that key data indicated a “leveling off” of economic activity.

Hong Kong rose 0.4 percent and Shanghai was up 1.7 percent, while Singapore added 0.1 percent and Jakarta piled on 1.8 percent. Taipei also gained.

But Tokyo finished 0.8 percent lower, while Seoul fell 0.2 percent and Wellington slipped 0.3 percent with Mumbai and Bangkok dropping 0.1 percent each.

Sydney sank 1.5 percent, with Australian traders spooked by the decision to impose a six-week lockdown in the second-biggest city of Melbourne”•which is a major contributor to the national economy”•as it struggles to control a new outbreak of the disease.

After “a five-day rally where the market’s up quite a bit, it’s not so surprising to have a little bit of a pause,” Jeff Mills, at Bryn Mawr Trust, said. “It’s just sort of the natural movements of the market. You can’t go up in a straight line every single day.”

And Stephen Innes at AxiCorp added: “As summer trading gets under way, investors are more prone to book profits and move to the sidelines.”

While the virus is the major weight around traders’ necks, they are also having to contend with other risk factors.

Bloomberg News reported that discussions had been held within the Trump administration on the possibility of undermining the decades-old US-Hong Kong dollar peg as part of an effort to hit back at China over the controversial new law in the city.

However, analysts said such a move was unlikely as it could put US assets held by China such as Treasuries at risk, while it would also send shockwaves through equity markets, a scenario Donald Trump would want to avoid ahead of a US presidential election. With AFP