Stocks fall on profit taking; Puregold drops

The stock market retreated Monday on profit taking, with many investors unloading issues that spiked in two consecutive sessions last week.

The Philippine Stock Exchange Index dropped 46.02 points, or 0.7 percent, to 6,628.49 on a value turnover of P5.4 billion. Losers beat gainers, 103 to 85, with 57 issues unchanged.

Puregold Price Club Inc. of retail tycoon Lucio Co tumbled 5.1 percent to P37.25, while fiber internet service provider Converge IT Solutions Inc. fell 3 percent to P19.40.

Aboitiz Power Corp. of the Aboitiz Group also shed 3 percent to P22.70, while Megaworld Corp., the biggest lessor of office spaces, declined 2.9 percent to P3.04.

The rest of Asian investors on Monday struggled to build on last week’s gains as profit-takers stepped in while awaiting the next buying catalyst, with eyes on the upcoming release of key US jobs data.

Still, despite worries that the expected surge in economic activity this year will send prices soaring and force central banks to tighten monetary policy, a forecast-beating jump in a closely watched US inflation gauge was taken in stride.

The calm reaction marked a change from recent times, with benchmark 10-year Treasury yields, a key gauge of future interest rates, inching down slightly.

“There is likely more upside to go on the inflation scare front in the months ahead as base effects, the lagged impact of commodity price hikes and bottlenecks continue to feed through, but there are now a few more signs that it will be transitory,” AMP Capital’s Shane Oliver said.

All three main US indexes ended Friday with small gains, though Asia fluctuated.

Tokyo, Hong Kong, Sydney and Singapore dipped but there were gains in Shanghai, Seoul, Mumbai, Taipei, Jakarta, Bangkok and Wellington.

There was little reaction to figures indicating growth in China’s factory activity slowed slightly in May.

Focus is now on the release of US jobs figures this week, which will provide a fresh update on the state of the world’s top economy as it emerges from last year’s pandemic-induced collapse.

Meanwhile, the OECD raised its global growth forecast for this year but warned that “too many headwinds persist” as not enough COVID vaccines are reaching emerging economies. It said it saw expansion of 5.8 percent, up from a previous estimate of 5.6 percent.

Patrik Schowitz of JP Morgan Asset Management said: “It still feels like a market looking for direction in the face of uncertainty around the interplay between much-feared inflation and much-hoped-for growth recovery.

“There still seems an extended growth runway ahead as further regions around the globe get the COVID and vaccination situation under control—nothing we’re seeing is really challenging that expectation, although it will take time, especially across some of the major emerging market economies.”

Oil prices edged up and were approaching levels not seen since January last year before the pandemic hammered demand. With AFP