Stocks decline slightly; ICTSI, BDO lead losers

The stock market slipped Monday along with the rest of Asia, as traders took a breather after last week’s rally while keeping tabs on Federal Reserve monetary policy plans in light of the positive outlook for the global economy.

The Philippine Stock Exchange Index shed 12.55 points, or 0.2 percent, to 6,937.96 on a value turnover of P5.4 billion. Gainers, however, beat losers, 107 to 96, with 43 issues unchanged.

International Container Terminal Services Inc., the biggest port operator and owned by tycoon Enrique Razon Jr., fell 1.6 percent to P161.40, while BDO Unibank Inc., the largest lender in terms of assets, also declined 1.6 percent to P113.20.

Emperador Inc., the biggest liquor maker, however, rose 3.7 percent to P11.80, while AC Energy Corp., a unit of conglomerate Ayala Corp., climbed 2.9 percent to P8.42.

The rest o f Asian stocks were slightly lower Monday.

The bipartisan agreement between US lawmakers Thursday on a huge infrastructure deal provided an extra boost to already upbeat investors, who have also been calmed by Fed pledges to maintain record-low interest rates and vast bond-buying for as long as the recovery needs.

Even a sharp spike in a closely watched gauge of consumer spending for May was taken in stride on trading floors, with much of the surge being attributed to rallying energy costs.

After another record close on Wall Street, Asia struggled to maintain momentum on Monday.

Tokyo, Hong Kong, Wellington, Mumbai, Bangkok and Jakarta all eased, while Shanghai, Sydney and Seoul were barely moved. Singapore and Taipei rose.

Observers warned that while the general mood was positive, investors remained on edge as inflation continues to be a worry.

The Fed is “far away from tapering, they are far away from increasing rates, but at some point, if the markets sees the Fed being too far behind the curve you will start to see some adjustment on the long end of the curve,” Charles-Henry Monchau, at FlowBank SA, told Bloomberg TV.

“We might not have seen the peak in bond yields. I would not be surprised to see some adjustments in the coming months. That might be an excuse for the market to take a bit of profit.”

Traders will also be keeping a close eye on Washington after Joe Biden, Democrats and Republicans came together for a rare agreement on the near $1-trillion roads and bridges plan, with the president acknowledging there was no guarantee the package would get through Congress.

The White House on Saturday stepped back from a call to link it to a wider tax-and-spending bill—including priorities such as climate change mitigation, child care, schools and social services—that is opposed by Republicans.

The announcement fanned fears Biden had threatened to veto the new agreement.

Still, National Australia Bank’s Ray Attrill said: “One of the catalysts for US equities achieving new record highs last week was the news of a handshake deal between the president and a bipartisan group of senators, but some Republican senators now ‘smell a rat’ in so far as voting for the infrastructure bill could be akin to also voting for the American Families Plan.” With AFP