The stock market retreated Friday on profit taking along with the rest of Asia to end a four-day rally, with fears over the fast-spreading Delta variant hounding investors.
The Philippine Stock Exchange Index slumped 85.29 points, or 1.3 percent, to 6,633.22 on a value turnover of P6.3 billion. Gainers, however, beat losers, 113 to 78, with 47 issues unchanged.
International Container Terminal Services Inc. of tycoon Enrique Razon Jr., the biggest port operator, fell 2.7 percent to P178, while Bank of the Philippine Islands, the third-largest bank in terms of assets, also declined 2.7 percent to P82.15.
Converge ICT Solutions Inc., a fiber internet service provider, rose 5.2 percent to P29.40, while AC Energy Corp. of the Ayala Group advanced 4.6 percent to P8.95.
The rest of Equity markets fell in Asia on Friday, with fears over the the Federal Reserve’s taper plans and China’s ongoing regulatory crackdown taking the wind out of the sails of the global recovery rally.
Hong Kong fell almost two percent, with Beijing’s drive to tighten its grip on the Chinese economy continuing to batter confidence and delivering a blow to market heavyweights Alibaba and Tencent.
Shanghai, Tokyo, Sydney, Seoul, Taipei, Wellington and Mumbai also fell, though there were gains in Singapore, Bangkok and Jakarta.
Investors have for more than a year sent valuations surging on the back of colossal government and central bank support as well as optimism that the rollout of vaccines will help fight back against the coronavirus and allow economies to reopen.
But while inoculations continue to be administered and life is slowly returning to a semblance of normal, the virus mutation has forced experts to rethink their outlooks for growth as some countries reimpose containment measures and infection rates rise.
The prospect that the world may not emerge entirely from the crisis as early as hoped has knocked confidence in recent weeks, though the general view is that the end is still in sight.
Compounding the downbeat mood were minutes from the Fed’s July meeting that indicated it is likely to start winding down its ultra-loose monetary policy—the juice that has fueled a long-running rally—by the end of the year.
A speech by Fed boss Jerome Powell at next week’s gathering of central bankers and finance chiefs at Jackson Hole, Wyoming, will be keenly watched for a taper timetable.
Still, analysts said the issue was just part of a range of issues absorbing investors now.
“Perhaps the best one can say is that the minutes were the straw that broke the camel’s back,” said National Australia Bank’s Rodrigo Catril. “We would attribute heightening concerns over the global growth outlook as the main cause for the turn in sentiment.
“Recent softer-than-expected Chinese economic data along with lockdowns/activity restrictions around the globe due to a rise in Delta infections have been simmering for sometime now (and) China’s regulatory/credit tightening drive has not helped either.”
And OANDA’s Edward Moya added: “Regardless of Fed tapering timing, growth is only getting pushed further out, but given the excessive froth in the market a pullback seems warranted. With AFP