Stocks rose Tuesday to end snap a two-day slump as bargain hunters picked up select issues that have fallen sharply on rising COVID-19 cases and stricter lockdown rules in the country.
The Philippine Stock Exchange Index advanced 51.18 points, or 0.8 percent, to 6,446.35 on a value turnover of P5 billion. Gainers beat losers, 125 to 76, with 52 issues unchanged.
Puregold Price Club Inc. of retail tycoon Lucio Co climbed 3.4 percent to P40, while JG Summit Holdings Inc. of the Gokongwei Group rebounded 3.2 percent to P58.85.
Jollibee Foods Corp., the biggest fast-food chain, rose 2.9 percent to P181, but conglomerate Ayala Corp. slipped 1.4 percent to P725.
The rest of Asian markets mostly fell Tuesday as investors extended recent sell-offs owing to long-running fears that the expected global recovery will force central banks to wind down their easy-money programs earlier than hoped.
While Wall Street provided a positive lead with all three main indexes posting healthy gains, there is a reluctance on trading floors to push a year-long rally any further, while a stuttering vaccine roll-out and new lockdowns in Europe are adding to the angst.
Hong Kong lost more than one percent and Seoul fell one percent, while Tokyo, Shanghai, Sydney, Taipei and Bangkok were also in the red. Mumbai, Singapore and Wellington rose.
Focus this week will be on the first joint congressional testimony by Federal Reserve boss Jerome Powell and Treasury Secretary Janet Yellen, who will answer questions on their policy response to the pandemic.
It comes as markets are rattled by a sharp rise in US Treasury yields in recent weeks that have been fueled by bets that the forecast strong bounce in economic activity this year will fan inflation and force the bank to lift interest rates before 2024, as it has indicated.
The pair have repeatedly said they do not see the spike in inflation lasting and will maintain ultra-loose monetary policies—including record-low rates—until they have a grip on unemployment, and price rises are above two percent for an extended period.
Also on the radar this week is the auction of seven-year US Treasuries, which will be followed closely after last month’s weak sale sparked a sharp sell-off in bonds that sent yields soaring—yields go in the opposite direction to prices—and sparked a global market panic.
“The problem for risk markets is inflation will be an ongoing debate for another six to 12 months, if not longer,” warned Axi strategist Stephen Innes. “So, expect to remain stuck in the rough and tumble inflation ‘lather, rinse and repeat’ cycle as the rising tides of inflation ebb and flow.”
Oil markets extended recent losses on worries about the demand outlook as European countries including Germany and France reimpose strict containment measures and struggle to get their vaccine programs rolling properly, while the virus is picking up in other parts of the world.
On currency markets, the Turkish lira stabilized a day after plunging in reaction to news that President Recep Tayyip Erdogan sacked the country’s market-friendly central bank chief, raising concerns about another round of financial turbulence. With AFP
