The stock market fell Wednesday on profit taking after rallying the previous day, weighed down by lingering impact of the pandemic and prospects of a slow economic recovery.
The Philippine Stock Exchange Index dropped 77.63 points, or 1.1 percent, to 6,966.43 on a value turnover of P19.4 billion. Losers overwhelmed gainers, 145 to 82, with 45 issues unchanged.
Converge Information and Communications Technology Solutions Inc., a fiber internet service provider, declined 3.7 percent to P18.14, while BDO Unibank Inc., the biggest lender in terms of assets, was down 3.1 percent to P105.60.
MerryMart Consumer Corp., a supermarket chain owned by businessman Edgar Sia II, fell 1.9 percent to P7.20, but magnetite iron miner Apollo Global Capital Inc. rose 9 percent to P0.265.
Meanwhile, most markets fell in Asia on Wednesday, hit by profit-taking after a strong rally across the world in recent weeks, with investors worried valuations may have gone too far for now.
However, analysts said that while equities have room for a drop, the general view is that they will resume their strong upward march as vaccine rollouts, slowing infection rates and the easing of lockdowns allow economies to return to normal.
After a mixed lead from Wall Street, Asian markets stuttered, having enjoyed a clear run higher so far this year.
Tokyo, Sydney, Singapore, Seoul, Mumbai, Bangkok and Jakarta all fell, while Taipei and Wellington rose.
Hong Kong reversed an early sell-off to surge more than one percent in the afternoon—to break 31,000 for the first time since June 2018—fueled by huge interest from investors in mainland China, where markets are still closed for the Lunar New Year break. With AFP
Focus is also on Washington, as US lawmakers try to push through Joe Biden’s $1.9-trillion stimulus package, the prospect of which has been a key driver of a months-long surge across global equities.
Bets that the vast spending splurge will give an extra boost to the world’s top economy—and the prospect of business reopenings—have also fired inflation expectations, sending US Treasury yields close to one-year highs.
That has led to concerns about rising borrowing costs, which market-watchers fear could staunch the recovery and hit consumer spending.
“The move up in yields has been driven by increasing inflationary concerns amid a rise in energy prices along with the prospect of a big US fiscal stimulus and the global recovery entering a more solid stage as vaccine rollouts lead to the reopening of economies,” said National Australia Bank’s Rodrigo Catril.
Stephen Innes at Axi said in a note: “It’s difficult to tell if we have reached any significant inflection points, but it’s certainly starting to feel that the rip higher in US bond yields at least on the margins could be the match in the stimulus powder barrel.
“That being said it remains to be seen if any real drags will hinder the raging bull driving equity market sentiment these days.”
He added that traders remained confident the rescue package and Federal Reserve largesse—as well as reassurances it will keep monetary policy loose—will continue to lend massive support to markets. With AFP
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