Stocks fell slightly Thursday on profit taking as many investors stayed in the sidelines after the recent run-ups that sent the benchmark index close to the 7,000-point mark.
The Philippine Stock Exchange Index slipped 26.83 points,or 0.4 percent, to 6,875.71 on a value turnover of P3.6 billion. Losers beat gainers, 118 to 97, with 47 issues unchanged.
Conglomerate Ayala Corp. retreated 3.2 percent to P808.50, while JG Summit Holdings Inc. of the Gokongwei Group dropped 2.3 percent to P60.
Puregold Price Club Inc. of retail tycoon Lucio Co, however, rose 3.7 percent to P39, while conglomerate San Miguel Corp. climbed 3.1 percent to P120.
The rest of Asian markets rose Thursday ahead of US inflation data and a European Central Bank meeting, while traders also tracked China-US relations after Joe Biden dropped a Trump-era bid to ban TikTok and WeChat.
With the global economy seeing a blockbuster recovery from last year’s virus-induced collapse, investors are in a broadly buoyant mood with expectations that equities will continue higher thanks to re-openings, vaccinations, government stimulus and vast central bank support.
However, that optimism is being dampened by fears the rebound is causing a spike in inflation that will force banks—particularly the Federal Reserve—to wind back their ultra-loose programs sooner than previously flagged, despite constant reassurances they will not.
After another weak lead from Wall Street, Asia pressed higher.
Tokyo, Sydney, Singapore, Seoul, Taipei, Mumbai and Jakarta were all in positive territory. Hong Kong pared earlier gains to end flat while Wellington was slightly low
The release Thursday of May’s consumer price index is now crucial, with warnings that a big miss to the upside of the 4.7 percent forecast would ramp up expectations of policy tightening.
Still, observers said there seemed to be a little more calm on trading floors of late as investors accept the rises would be temporary owing to a lower base of comparison with last year and soaring commodity prices.
The yield on 10-year US Treasuries—a key gauge of future interest rates—dipped again Wednesday.
“Even if inflation comes out a little higher than… expectations, the Fed isn’t going to change its path,” Esty Dwek, at Natixis Investment Managers, told Bloomberg TV.
“There’s a lot of wait-and-see going on and really just thinking it would take a lot to really surprise markets.”
The European Central Bank is expected to hold its easy money policy in place for now, though its post-meeting statement will be pored over for its plans as the recovery develops.
“It will be hard to avoid taper talk so how the ECB responds to questions around tapering will be of central importance to the market’s expectations and the euro,” said Neil Wilson of Markets.com.
Traders were keeping tabs on relations between Beijing and Washington in the wake of Biden’s decision to revoke Donald Trump’s executive order against Chinese-owned mobile apps TikTok and WeChat. With AFP
