Stock market surges; Puregold, ICTSI climb

Stocks rallied Wednesday along with the rest of Asia as inflation worries ease, while vaccine and reopening optimism reinforce expectations for a strong global recovery.

The Philippine Stock Exchange Index jumped 144.53 points, or 2.3 percent, to 6,341.24 on a value turnover of P13.1 billion. Gainers overwhelmed losers, 140 to 74, with 47 issues unchanged.

Puregold Price Club Inc. of retail tycoon Lucio Co surged 7.6 percent to P35.50, while International Container Terminal Services Inc., the biggest port operator and owned by tycoon Enrique Razon Jr., advanced 5.5 percent to P145.60.

GT Capital Holdings Inc. of the Ty Group climbed 5.2 percent to P561.50, while SM Prime Holdings Inc. of the Sy Group rose 4.2 percent to P33.90.

Markets across Asia also gained.

After rallying for more than a year, equities have in recent months been jolted by fears that a forecast surge in economic activity—fueled by re-openings, stimulus and vaccinations—will send prices soaring and force central banks to wind back their ultra-loose monetary policies sooner than flagged.

A succession of Federal Reserve officials have continued to repeat the mantra that while the rebound will likely fan inflation, it will not last too long and they will not step back from their supportive measures—including record low interest rates—for the foreseeable future.

Those pledges have largely been brushed aside by traders who fear the Fed is in danger of moving too late, with explosive inflation data last month adding to their unease.

However, analysts said the concerns may be subsiding, while the latest drive to soothe concerns by high-ranking Fed members appeared to be bearing fruit. The yield of long-term US Treasuries, a key gauge of future interest rates, has stabilized after their recent sharp increase set off alarm bells.  

That was likely to open the road for markets to resume their upward march, with Asia seeing broad advances to extend Tuesday’s rally.

Tokyo, Hong Kong, Shanghai, Seoul, Taipei, Mumbai and Wellington all enjoyed gains. Sydney and Seoul dipped, though.

“Inflationistas look like they might be ready to throw in the towel,” said OANDA’s Edward Moya.  

“We are supposed to be seeing accelerating growth and mounting price pressures, but right now the surge across commodity prices has eased (copper, lumber, iron ore, and even soft grains), the housing market hit a top, and consumers’ short-term optimism retreated,” he added. With AFP

“The inflation debate is not over, but the majority of Wall Street believes it will be transitory.”

Still, investor optimism continues to be kept in check by worries about a spike in infections around Asia’s top economies including, among others, India, Japan, Taiwan, Singapore and Thailand, with vaccination rates also worryingly low.

Bitcoin bounced back above $40,000 after a bout of recent volatility, fueled by China’s warning of a crackdown on cryptocurrency use and mining and various tweets by tycoon Elon Musk.

The digital unit at one point last week almost fell below $30,000 for the first time since January before rebounding in recent days. With AFP