The stock market bounced back on Monday after Friday’s hefty losses on prospects of further economic reopening as daily COVID-19 cases continue to decline.
The Philippine Stock Exchange Index surged 90.79 points, or 1.2 percent, to 7,361.15 on a value turnover P14.2 billion. Losers, however, beat gainers, 113 to 85, with 48 issues unchanged.
Bloomberry Resorts Corp., the casino operator owned by port tycoon Enrique Razon Jr., advanced 4.3 percent to P6.09, while Jollibee Foods Corp., the largest fast-food chain, climbed 3.8 percent to P249.
Globe Telecom Inc., the second-biggest telecommunications firm, rallied 3.5 percent to P2,784, but noodles maker Monde Nissin Corp. sank 6.4 percent to P17.
The rest of Asian markets sank and oil prices rallied Monday after the United States warned Russia could attack Ukraine within days as diplomatic efforts to prevent a war appeared to fail, while fears over inflation were also keeping traders on edge.
The losses matched a sell-off in New York and Europe on Friday as Western powers prepare for a conflict in eastern Europe after Russian President Vladimir Putin dismissed calls by US counterpart Joe Biden and others to pull back.
Governments have told their citizens to leave Ukraine and US national security adviser Jake Sullivan warned last week that an invasion could begin “any day now” and would likely start with “a significant barrage of missiles and bomb attacks.”
German Chancellor Olaf Scholz was preparing to visit Kyiv and Moscow to try to head off the crisis.
The prospect of a conflict compounded the gloomy mood on trading floors after data Thursday showed US inflation hit a forecast-busting 7.5 percent in January, ramping up pressure on the Federal Reserve to hike interest rates by more than expected.
After sharp Wall Street losses on Friday, the dip continued in Asia.
Tokyo and Mumbai each shed more than two percent, while Hong Kong, Shanghai, Seoul, Jakarta, Wellington and Taipei were at least one percent down. Singapore and Bangkok were also off, though Sydney rose.
A “flight to safety for all markets will be the first order” if Russia invades, said Wai Ho Leong, a strategist with Modular Asset Management in Singapore.
“The impact on inflation will go beyond oil and gas,” he warned. “For the rest of the world, it is potentially a massive food shock—as Ukraine is a major exporter of grain—mainly corn and wheat.”
Wheat futures are up about eight percent since the start of the month.
Eli Lee at Bank of Singapore added that the volatility that had characterized markets so far this year would probably continue.
“In the scenario of military action, we could see a spike in oil and gas prices, which would exacerbate the issue of inflation over the near term, and result in a market-wide risk-off move,” he wrote in a note.
“This would inject volatility into risk assets and cause a bid for safe havens such as the Japanese yen, the US dollar and gold.”
Meanwhile, oil prices jumped, closing in on the $100-a-barrel mark last seen in 2014, as investors grow increasingly worried about supplies in the event of a war. With AFP
