Stocks tumble; Jollibee declines

Share prices slumped Wednesday along with the rest of Asia, with optimism over a possible coronavirus vaccine tempered by profit-taking and concerns about the slow progress being made by US lawmakers in drafting a new stimulus package.

The Philippine Stock Exchange Index tumbled 72.05 points, or 1.2 percent, to 6,064.26 on a value turnover of P4.5 billion. Losers beat gainers, 105 to 89, with 35 issues unchanged.

Jollibee Foods Corp., the biggest fast-food chain, fell 3.5 percent to P130, while MerryMart Consumer Corp., the newly-listed supermarket line owned by businessman Edgar Sia II,  dropped 4.1 percent to P2.36.

JG Summit Holdings Inc. of the Gokongwei Group declined 3.1 percent to P66.20, while conglomerate Ayala Corp. shed 2.5 percent to P746.

News that trials on a vaccine had shown early promise provided a much-needed boost to Asian equities, particularly as a spike in new infections around the world has caused governments to reimpose business-strangling containment measurements.

But with the European Union finally locking in their $860 billion deal on Tuesday, attention turns to Washington, where Republicans are struggling to put together a new bill to support the world’s top economy, with the $3 trillion of measures passed earlier this year about to dry up at the end of the month.

With one eye on developments on Capitol Hill, Asian equities moved in and out of positive territory through the day.

Hong Kong led losses, tumbling 2.3 percent after rising more than two percent on Tuesday, and following figures showing another record rise in new infections in the city that has led to new fears of tighter restrictions being imposed.

Tokyo shed 0.6 percent and Sydney lost 1.3 percent, while Singapore, Bangkok, Wellington and Jakarta were also down.

But Shanghai rose 0.4 percent, Mumbai added 0.1 percent and Taipei put on 0.6 percent.

The wall of government cash and central bank back-stop, along with similar measures in other countries, have helped fire a surge in equities across the planet since they hit their March depths.

However, while Democrats have drawn up a new $3.5-trillion plan, Republicans and officials in the White House are bogged down trying to draw up their own package, which is said to be around $1 trillion.

Among the sticking points are the extension of a supplement to unemployment benefits and Donald Trump’s desire for tax cuts, and with Congress due to take a break in August there is a concern a deal will not be agreed, leaving millions without cash.

Still Trump said he was optimistic, telling a White House briefing: “We’re working very hard on it, we’re making a lot of progress. With AFP

“I also know that both sides want to get it done.”

AxiCorp’s Stephen Innes added: “I do not understand why the market is fretting about the US stimulus plan. It has been widely telegraphed there could be a delay, not to mention the slow bipartisan tango that always seems to happen around these events.

“No lawmaker, especially in an election year, wants to… be accused of being frugal when people are dying across the US Sunbelt at record levels.” With AFP