Stock market declines; MerryMart leads losers

Stocks retreated Monday on profit taking, weighed down by an uptick in the inflation rate to a 22-month high of 3.5 percent in December from 3.3 percent in November.

The Philippine Stock Exchange Index slipped 63.32 points, or 0.9 percent, to 7,134.18 on a value turnover of P11.3 billion. Losers beat gainers, 133 to 87, with 43 issues unchanged.

Speculative issue MerryMart Consumer Corp. tumbled 7.6 percent to P7.38, while AC Energy Philippines Inc., a unit of conglomerate Ayala Corp., dropped 6.1 percent to P9.58.

Puregold Price Club Inc. of retail tycoon Lucio Co fell 6.5 percent to P38.40 but Dito CME Holdings Corp., the third major mobile phone firm, rose 2.9 percent to P13.40.

Meanwhile, most Asian markets reversed early losses Tuesday as hopes for the economic outlook trumped worries over a coronavirus surge, new lockdowns, a slow vaccine rollout and uncertainty over US Senate elections.

Asian equities struggled early Tuesday but many managed to bounce back.

Hong Kong was among those that shifted from red to green, helped by news that the New York Stock Exchange had abandoned plans to delist three state-owned Chinese telecom companies.

The move reversed a weekend decision that further dented already strained relations between the world’s two superpowers.

Jackson Wong, at Amber Hill Capital, said: “Some funds that had an obligation to unload these shares will now need to buy them back.

“Some investors are also starting to pricing in a scenario that the decision to halt delistings could be a start of a de-escalation in tensions between China and the US.”

The three firms all rallied, having tumbled Monday. China Unicom was up nearly nine percent, while China Mobile and China Telecom each rose more than six percent.

Shanghai also rose, along with the yuan.

There were also gains in Sydney, Seoul, Mumbai, Taipei, Jakarta, Bangkok and Wellington, though Tokyo and Singapore fell.

While analysts are broadly upbeat about the long-term outlook this year, the nascent inoculation programs have yet to have an impact, meaning the first few months of the year will likely be bumpy.

And the task ahead was laid bare by data showing almost 280,000 Americans were infected in one day, while the country’s death toll passed 300,000.

And as a new, potentially more transmissible strain rampages around the world, governments are being forced to tighten containment measures again, with England going into a six-week full lockdown after officials warned hospitals could soon face collapse. With AFP

Such measures are fueling concerns the already stuttering economic recovery could be jolted off course in the first quarter, while the rollout of vaccines has been slower than hoped, adding to the market jitters.

“The first quarter will no doubt be tough; the spread has been horrific throughout the festive period and restrictions are being tightened and extended,” said Craig Erlam, senior market analyst at OANDA.

“The toll on the economy will be significant but, thanks to the vaccine, consigned mostly to the first quarter.” With AFP