Stocks surge; Converge, ALI advance

The stock market jumped Monday on declining COVID-19 cases in Metro Manila and improving economic prospects as the government moves to reopen further the economy.

The Philippine Stock Exchange Index soared 217.15 points, or 3.1 percent to 7,124.01 on a value turnover of P11.8 billion. Gainers outnumbered losers, 122 to 60, with 58 issues unchanged.

Fiber broadband service provider Converge ICT Solutions Inc. advanced 7.1 percent to P36, while Security Bank Corp., the eight biggest lender in terms of assets, climbed 8 percent to P118.80.

Major property developer Ayala Land Inc. of the Ayala Group rose 6.4 percent to P36, while

First Gen Corp. of the Lopez Group gained 6.2 percent at P30.80.

Most Asian markets also rose on Monday to extend last week’s rally after US lawmakers averted a painful debt default, but another jump in oil prices added to inflation concerns as the Federal Reserve prepares to taper its ultra-loose monetary policy.

A big miss on US jobs creation last month did little to change expectations that the Fed will start winding back its massive bond-buying program as it looks to keep a cap on price rises just as the global recovery shows signs of slowing.

The US Labor Department said just 194,000 new posts were taken up last month, less than half what was forecast, owing to weakness in the service sector, though there was an upward revision to gains in the previous two months.

“Notwithstanding the soft payrolls headline, the inner strength in the report suggests the numbers have passed the Fed’s test for a ‘reasonable enough’ report to allow for a… tapering announcement in November,” said National Australia Bank’s Rodrigo Catril.

Wall Street’s three main indexes ended in the red, but Asia fared much better in early exchanges on Monday.

Tokyo was boosted after new Prime Minister Fumio Kishida said he was not considering hiking capital gains tax any time soon, soothing investor worries that the government was planning such a move.

A rise in the dollar to a three-year high against the yen—on expectations for tighter US monetary policy—provided added support.

Hong Kong   jumped two percent with tech firms enjoying some much-needed buying after China fined food delivery giant Meituan less than expected over monopolistic practices. The firm ended up more than eight percent, ecommerce giant Alibaba climbed 7.9 percent, while gaming firm XD put on more than nine percent.

Singapore and Mumbai also enjoyed gains, though Bangkok, Sydney and Wellington dipped. Shanghai was flat.

The broad advances built on Friday’s positive performance that came in the wake of news that Democrats and Republicans had agreed a deal to lift the US debt ceiling to avoid an economically catastrophic default.

Attention will be on the release of inflation data out of China and the United States this week, with the surge in prices across the world becoming increasingly problematic for governments as economies reopen and demand for goods returns with supplies limited.

The issue has raised speculation that the global economy could be heading for a period of stagflation as inflation surges and growth stays tepid, especially with crude still marching higher to sit at multi-year highs. With AFP