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Stock market falls to end six-day rally

Share prices retreated Friday on profit taking to snap a six-day rally that sent the benchmark index above the 7,300-point mark.

The Philippine Stock Exchange Index fell 22.11 points, or 0.3 percent, to 7,289.61 on a value turnover of P5.3 billion. Losers beat gainers, 105 to 82, with 57 issues unchanged.

AC Energy Corp., a unit of the Ayala Group, dropped 3.8 percent to P11.04, while noodles maker Monde Nissin Corp. declined 2.3 percent to P16.20.

Jollibee Foods Corp, the biggest fast-food chain, lost 2.5 percent at P225.20, while LTG Group Inc. of airline and tobacco tycoon Lucio Tan slipped 2.1 percent to P10.22.

The rest of the markets in Asia fluctuated Friday following a record-breaking lead from Wall Street, while a report that troubled developer China Evergrande had paid interest on an overdue bond a day before the deadline eased concerns over a default.

Another round of positive earnings provided a further lift to Wall Street with the S&P 500 hitting its first all-time high since the start of September as traders grow optimistic that companies are weathering a range of issues including surging inflation, supply chain snarls and slowing economic growth.

Surging prices around the world and central banks’ moves to end their financial largesse have acted as a major drag on markets for months owing to the prospect that the era of cheap cash is coming to an end.

“The bout of investor nervousness has proven transitory, even as inflationary signals persist,” said Geir Lode, at investment manager Federated Hermes.

“Equity markets are back on the rise as investors shrug off their recent concerns, with major indices near all-time highs. Earnings season is now underway in the US and while it is early days, the initial flurry of earnings have been well received.

“The supply squeeze combined with increased demand is particularly challenging, but blue-chip companies that can prove their ability to maintain profitability in an inflationary environment are likely to be well rewarded.”

With South Korea, Singapore and New Zealand among the countries already lifting interest rates—and the Bank of England expected to act soon—all eyes are on the Federal Reserve, which has indicated it will begin winding back its bond-buying program by the year’s end.

Observers widely expect it to announce a move next month, but the key question is when it will lift borrowing costs. Some have estimated as soon as mid-2022.

After a blockbuster start to the week, the Asian rally has petered out in the past two days.

Tokyo, Hong Kong, Sydney, Singapore, Mumbai and Jakarta rose but there were losses in Shanghai, Seoul, Wellington and Taipei.

The mood in Hong Kong was lifted by   a report that Evergrande had made a key offshore interest payment—just before Saturday’s deadline—on an offshore bond.

Fears that the property giant could collapse and send shock waves through the Chinese economy have rattled buyers and markets, and shares plunged as the group resumed trading Thursday after a two-week halt.

But on Friday, the state-backed Securities Times said the firm had wired an $83.5-million payment first due on September 23, citing “relevant channels.” Saturday was the last day of a 30-day grace period. With AFP

Topics: Philippine Stock Exchange Index , Jollibee Foods Corp , Monde Nissin Corp
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