Stocks rise slightly; Manila Water advances

The stock market rose slightly Tuesday after the inflation rate unexpectedly eased to  4.8 percent in September from 4.9 percent a month ago and COVID-19 infections continued to drop.

The Philippine Stock Exchange Index added 20.35 points, or 0.3 percent, to 6,981.24 on a value turnover of P6.6 billion. Losers, however, beat gainers, 106 to 84, with 58 issues unchanged.

Fiber broadband provider Converge ICT Solutions Inc. surged 5 percent to P42, while Globe Telecom Inc., the second-biggest mobile phone firm, climbed 3.8 percent to P3,114.

Robinsons Retail Holdings Inc. of the Gokongwei Group advanced 5.3 percent to P58.20, while Manila Water Co. Inc. of the Ayala Group gained 3.5 percent at P20.50.

Most Asian markets fell Tuesday following a Wall Street slump as soaring oil prices put further upward pressure on inflation while a standoff in Washington over raising the country’s borrowing limit fueled fears of a catastrophic US debt default.

Investors were nervously monitoring developments in the crisis surrounding troubled property giant China Evergrande, which has raised warnings about contagion in the world’s number two economy and possibly beyond.

A decision Monday by OPEC and other major producers not to increase their output by more than previously agreed—despite tightening supplies and rising demand—sent crude prices rocketing, with WTI hitting a seven-year high and Brent a three-year peak. Both main contracts rose Tuesday.

The announcement fanned expectations that inflation, already sitting at multi-year highs, will spike further, putting pressure on central banks to taper their ultra-loose monetary policies sooner than flagged with interest rates to then rise.

And some analysts are warning of a period of stagflation, in which prices surge while economic growth stalls.

Crude markets have come under pressure as the global economy emerges from the pandemic, pushing up demand for travel, among other things, while the approaching northern hemisphere winter has seen gas prices jump, which has in turn led companies to switch to oil.

“Prices are likely to remain supported in the final quarter, with gas-to-oil switching and pricey coal adding to oil consumption,” Will Sungchil Yun, an analyst at VI Investment Corp, said.

All three main indexes on Wall Street ended deep in the red, led by the Nasdaq, as tech firms took a beating owing to their susceptibility to higher interest rates.

And the losses continued in Asia, with Tokyo briefly sinking as much as 3.5 percent before paring some of the losses. Sydney, Seoul, Singapore, Wellington and Jakarta also fell.

However, Hong Kong reversed early losses following Monday’s sharp drop, while Taipei, Mumbai and Bangkok edged up. Shanghai was closed for a holiday.

“It looks like we are in for a bit of a chop-fest in financial markets for the rest of the week, until Friday’s (US jobs data) gives the street some clarity on the Federal Reserve taper,” said OANDA’s Jeffrey Halley.

And Emily Weis at State Street told Bloomberg Television: “We think there is going to be more volatility in these markets. With AFP