Stocks rise; Ayala Land, Puregold climb

Stocks rose slightly Monday as optimism about the global recovery was offset by concerns about a spike in new infections in several countries that have officials battling to avert new lockdowns.

The Philippine Stock Exchange Index added 14.22 points, or 0.2 percent, to 6,283.58 on a value turnover of P5 billion. Losers, however, beat gainers, 99 to 85, with 58 issues unchanged.

Major property developer Ayala Land Inc. climbed 5.6 percent to P32.95, while Puregold Price Club Inc. of retail tycoon Lucio Co advanced 5.4 percent to P33.35.

Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, hospitals and infrastructure, climbed 5.2 percent to P3.85, but DITO CME Holdings Corp., the third major mobile phone firm, sank 9.9 percent to P8.10.

The rest of Asian markets were mixed Monday. Wall Street provided another strong lead after data showed US retail sales were flat last month, which helped ease traders’ fears that a surge in inflation could force the Federal Reserve to wind back its ultra-loose monetary policies sooner than expected.

However, a fall in consumer confidence owing to rising prices indicated the issue was unlikely to go away any time soon, and analysts said central bank officials had to tread a fine line between getting the economy back on its feet and keeping inflation under control.

“On the one side, we have the Fed’s view, apparently embraced by equity investors, implying there is nothing to see here, given that base effects and reopening dynamics mean we should expect volatility in the data and no one said reopening was going to be cheap,” said National Australia Bank’s Rodrigo Catril.

“On the other side of the argument… (are) rising concerns that inflation is becoming unanchored with a decline in consumer sentiment a reflection of the negative impact inflation is having on disposable income. So at what point does higher inflation become problematic for policy?”

Hong Kong, Shanghai, Sydney, Singapore, Mumbai and Wellington all rose.

However, Tokyo, Seoul, Bangkok, Jakarta and Taipei were all lower as some governments in the region struggle to contain new coronavirus cases.

The rise in infections has forced Taiwan to order stricter social distancing measures for the capital and surrounding areas, while Japan extended a state of emergency as calls grow for the Olympics to be scrapped.

And in Singapore, most in-school classes have been scrapped while an already once-delayed travel bubble planned for this month with Hong Kong has been put off again owing to a sharp pick-up in infections in the city.

There are also worrying new outbreaks in Thailand and Malaysia.

Focus this week is on the release of minutes from the Fed’s latest policy meeting at the end of last month, which will be pored over for an idea about members’ views on inflation in light of surging commodity prices, supply bottlenecks and economic re-openings.

“Record highs in copper prices and fears over extended oil price gains will be hard to ignore” heading into the second half of the year, said Eric Robertsen at Standard Chartered. With AFP