Stock market down again; MerryMart falls

The stock market fell Tuesday on profit taking and concerns about soaring virus cases and new lockdowns in Europe and the United States.

The Philippine Stock Exchange slipped 22.50 points, or 0.3 percent, to 7,202.39 on a value turnover of P10.1 billion. Losers overwhelmed gainers, 203 to 39, with 33 issues unchanged.

Security Bank Corp., the seventh biggest lender in terms of assets, dropped 3.9 percent to P132.50, while DoubleDragon Properties Corp. slumped 4.6 percent to P15.76.

Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, hospitals and infrastructure, declined 3.9 percent to P4.17, while MerryMart Consumers Corp. fell 4.4 percent to P5.93.

The rest of Asian equities and oil tumbled again Tuesday, while fears over a new strain in Britain and stuttering Brexit trade talks kept the pound under pressure.

The mutated virus, which is said to be 70 percent more transmissible, has forced numerous countries around the world to shut their borders to the UK and has overshadowed the rollout of vaccines and news that US lawmakers had agreed a new stimulus.

Analysts said investors were taking the opportunity to cash in recent gains as they wound down for the festive break, with most saying 2021 will see a surge across markets as the economy opens up after people are inoculated.

However, they pointed out that long-term optimism is being kept grounded by concerns about the immediate impact of the latest wave of infections.

“What we’ve seen out of the UK is a scary thing for the markets, which could incentivize some profit-taking,” Steven Wieting, at Citigroup Private Bank, told Bloomberg TV. But the vaccination drive should be a “game-changer,” he added.

Shanghai, Seoul, Singapore and Jakarta all fell more than one percent. Tokyo shed one percent, while Sydney lost 1.1 percent as investors grew increasingly worried about a spike in new infections in the city that has led to the imposition of containment measures.

Taipei also lost more than one percent after news that Taiwan had seen its first locally transmitted infection since April.

There were also losses in Hong Kong and Mumbai, though Wellington and Bangkok rose.

The losses extended Monday’s sell-off and a retreat on Wall Street.

Axi strategist Stephen Innes sounded a note of warning for early next year.

“You will read a lot of after-the-fact analysis suggesting (Monday) was a holiday-exaggerated selloff,” he said in a note. “To a large degree, that might be the case on some overbought positions like oil and short dollar.”

“However, ignoring these early warning signals and not bracing yourself for a challenging start to 2021 is flat-out dumb. Indeed, this could only be the tip of a reflationary washout.

“The risk is growing for significantly extended lockdowns in several countries. There is a gap to be bridged between now and when experts expect herd immunity—in the middle of the second quarter at the earliest.” With AFP