Market slumps; Jollibee declines

The stock market sank Thursday on profit-taking and amid rising cases of COVID-19 that may delay the full reopening of the economy.

The Philippine Stock Exchange Index tumbled 92.92 points, or 1.5 percent, to 6,192.58 on a value turnover of P5.1 billion. Losers beat gainers, 104 to 87, with 39 issues unchanged. 

President Rodrigo Duterte said he would not gamble on fully reopening the economy and follow the lead of other countries now grappling to contain a resurgence of COVID-19 infections.

SM Prime Holdings Inc. of the Sy Group fell 3.9 percent to P30.50, while parent SM Investments Corp. declined 3.1 percent to P945.

Jollibee Foods Corp., the biggest fast-food chain, dropped 4.5 percent to P140, but GMA Network Inc. advanced 4 percent to P5.71.

The rest of Asian markets rose Thursday following another record close on Wall Street as concerns about a new spike in coronavirus infections around the world were overshadowed by optimism for the economic recovery.

The giant wall of money stumped up by governments and central banks was also providing crucial support to nervous equity traders, even as some countries reimposed certain containment measures.

Analysts expect the colossal cash back-up will likely continue to push asset prices higher.

As long as central banks “have the intention of continuing to try to provide stimulus to the global economy, markets will continue to drive higher even as they dislocate from the fundamentals that would otherwise normally drive earnings and stock prices,” Shana Sissel, at Spotlight Asset Group, told Bloomberg TV.

Shanghai rallied more than one percent as data showed a pick-up in inflation that indicates the world’s number-two economy continues to improve.

Tokyo ended 0.4 percent higher, while Sydney added 0.6 percent following Wednesday’s sharp drop as Australia’s second-biggest city Melbourne imposed a fresh lockdown on five million residents to combat a new virus outbreak.

Hong Kong edged up 0.1 percent, while Seoul, Taipei, Mumbai, Bangkok, and Jakarta were also higher.

However, Singapore and Wellington fell.

The broad advance came after all three main New York indexes rose, with the Nasdaq rallying 1.4 percent to its fourth record in five sessions.   

The easing of lockdowns and a healthy run of economic data have provided a boost to world markets in recent weeks―with some up around 30-40 percent from March lows―though the major driver has been the trillions of dollars in stimulus and cheap credit. With AFP

Britain on Wednesday unveiled a $40-billion budget to kick-start the economy, which tops up the $350 billion already set aside.

“The US is also likely to continue its spending spree in August, with up to $1 trillion of additional stimulus, and should the EU’s package be nearly as big as the initial proposal, liquidity won’t be an issue in the developed world this year,” said Ken Berman at Gorilla Trades.

“China is also in the midst of an unprecedented liquidity ‘experiment’ and should the global economic recovery remain on track risk assets could be on fire in the second half of the year. Stay tuned!” With AFP

Topics: COVID-19 , Philippine Stock Exchange Index , Rodrigo Duterte
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