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Friday, March 29, 2024

Market climbs; Jollibee, SM Prime lead advances

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The stock market extended its gains Tuesday, lifted by the launching of the country’s  COVID-19 vaccination drive Monday.

The Philippines Stock Exchange Index rose 46.57 points, or 0.7 percent, to 6,919.54 on a value turnover of P9.9 billion. Losers, however, beat gainers, 121 to 105, with 44 issues unchanged.

The vaccine rollout started in six Manila hospitals a day after the government received 600,000 donated doses from China.

Jollibee Foods Corp., the biggest fast-food chain, advanced 4 percent to P186, while SM Prime Holdings of the Sy Group added 3.2 percent to P37.20.

JG Summit Holdings Inc. of the Gokongwei Group climbed 3.8 percent to P66.90, while unit Universal Robina Corp., the largest snack food maker, gained 2.8 percent to P132.70.

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The rest of Asian markets struggled Tuesday to maintain a global rebound from last week’s rout as the improving economic outlook and vaccine rollouts were offset by lingering worries that valuations may have run too far.

US lawmakers’ push to get Joe Biden’s huge stimulus through Congress in the next two weeks and Wall Street’s powerful lead—driven by a rally in tech firms—were not enough to keep spirits up, with inflation fears also hanging in the background.

Hong Kong and Shanghai turned into negative territory as the day wore on, after a top Chinese regulator raised concerns that bubbles were forming in financial markets.

Tokyo, Sydney and Taipei also fell, but there were gains in Seoul, Singapore, Wellington, Jakarta and Mumbai.

A ramping-up of immunizations, falling infection rates, government and central bank support and the easing of lockdown measures have fanned expectations that the global economy will enjoy a blistering recovery this year and next, helping propel equities to record or multi-year highs.

But the bright-eyed optimism has given way in recent weeks to worries that the so-called reflation trade will send prices soaring and force officials at the Federal Reserve and elsewhere to wind in their ultra-easy monetary conditions, including lifting interest rates.

And the rise of yields in government bonds in the US and other key economies last week sparked a mini meltdown, which was exacerbated by profit-taking as investors considered some gains to have run a little too far.

However, a stabilization in the bond market Friday and Monday appeared to have staunched the bleeding for now, while analysts said worries over a surge in inflation and rate cuts were overdone.

And in an interview, top Fed official Thomas Barkin reiterated the message from his bank colleagues that the rise in yields was nothing to be worried about.

“In fact, I would be disappointed if we didn’t see yields… rise as the outlook improves,” he told the Wall Street Journal in an interview.  

“If the driver is—as it seems to be—news about vaccines, or news about the health of the economy, or news about fiscal stimulus, then I think it’s a natural reaction.”

US and European markets were not reflective of their underlying economies and would face corrections “sooner or later,” said China Banking and Insurance Regulatory Commission chairman and central bank member Guo Shuqing on Tuesday. With AFP

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