Stocks closed flat Wednesday as investors weighed President Rodrigo Duterte’s warning Tuesday that he might impose a stricter lockdown if COVID-19 infections surged again.
The Philippine Stock Exchange Index added just 0.97 point to 6,245.71 on a value turnover of P4.8 billion. Gainers beat losers, 115 to 82, with 47 issues unchanged.
President Dutete said the Philippines must prepare for the worst for a more contagious coronavirus variant that could bring more hardship to the people and economy.
DITO CME Holdings Corp., the third major mobile phone company jumped 28.8 percent to P9.84, while Jollibee Foods Corp., the biggest fast-food chain, advanced 4.6 percent to P175.
Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, hospitals and infrastructure, fell 4 percent to P3.60, while Metropolitan Bank & Trust Co., the second-largest lender in terms of assets, declined 2.1 percent to P45.
The rest of Asian markets fell Wednesday as investors struggled to break out of a long-running cycle of volatility, with optimism over the economic recovery playing off against fears about inflation, while oil prices extended their losses on reports of a possible breakthrough in the Iran nuclear talks.
Asian markets were well in the red, with worries about new COVID-19 infections in several countries adding to the selling pressure.
Sydney fell close to two percent, while Tokyo, Singapore, Wellington and Jakarta were all off more than one percent. There were also losses in Shanghai, Mumbai, Taipei and Bangkok.
Bitcoin was also taking another beating after China’s central bank said cryptocurrencies cannot be used for payments, adding to the unit’s woes after recent comments from tycoon Elon Musk and Tesla.
After a broadly healthy start to the week, regional traders went into selling mode early Wednesday following a retreat on Wall Street where technology firms were again the whipping boys with Apple, Amazon and Facebook all losing more than one percent.
Focus is back on the impact that an expected burst of economic activity this year will have on inflation, which many warn could force central banks—particularly the Federal Reserve—to wind back their ultra-easy monetary policies, including possibly hiking interest rates.
That is despite repeated pledges by bank officials that they will not move for the foreseeable future.
Traders will be closely reading through the minutes of the Fed’s April meeting when they are released later in the day, hoping for an idea about the board’s thoughts on its response to rising prices.
“The key to inflation will be if we see enough wage growth as the labour market recovery continues to bring back many low-paying jobs,” said OANDA’s Edward Moya.
“Bank of America’s announcement to raise the minimum wage to $25 an hour by 2025 shows that the need to lure talent might keep delivering upward pressures on wages.”
Still, he added: “This wage growth trend could have some momentum as corporate America will have to provide more incentives to fill vacancies. Even if the outlook for wage growth accelerates higher throughout the summer, the Fed will stand by their belief that inflation will be transitory.” With AFP
