Market slips; SM Prime, GT Capital fall

Share prices fell Wednesday on profit taking with some investors dumping their holdings in favor of speculative stocks.

The Philippine Stock Exchange Index dropped 54.74 points, or 0.8 percent, to 6,901.91 on a value turnover of P6.4 billion. Losers beat gainers, 109 to 94, with 47 issues unchanged.

SM Prime Holdings Inc. of the Sy Group declined 3.2 percent to P36.50, while GT Capital Holdings Inc. of the Ty Group slipped 2.9 percent to P607.

Emperador Inc., the biggest liquor maker, however, advanced 6.5 percent to P12.80, while major noodle maker Monde Nissin Corp. rose 3 percent to P16.52.

Meanwhile, Asian equities mostly rose Wednesday, building on strong gains in Europe and Wall Street as investors were buoyed by optimism over a strong economic recovery despite fears over rising virus cases around the world.

Vaccine optimism was also given an extra boost after Moderna said its drug protected against the Delta strain that has spread rapidly around the world and accounts for an increasing number of new infections.

Traders were given a healthy lead from their US counterparts after the S&P 500 and Nasdaq again finished at records in New York as data showed US consumer confidence surged in June to its highest pandemic-era level.

The Conference Board’s monthly report showed Americans increasingly upbeat about the economy and their job prospects, putting aside worries over rising prices.

“Low virus transmission, vaccinations, and expanded reopenings made consumers much more confident,” Oren Klachkin of Oxford Economics said. “Consumers are coming out of their shell.”

The positive mood bodes well for other key data this week including on factory and services activity, with the crucial June jobs report—which will give an up-to-date snapshot of the world’s biggest economy—due on Friday.

The advance in New York, which was mirrored in Europe, flowed through to most of Asia. Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei, Mumbai, Bangkok and Jakarta were all up, though Hong Kong and Tokyo were down.

There was little movement in response to data out of China showing growth in the country’s manufacturing sector inched down marginally but officials warned over supply shortages of chips and commodities.

Still, while the broad outlook is upbeat, traders are keeping an eye on the spread of the more transmissible Delta variant, which began in India and is sending infection rates soaring, forcing some governments—from Australia and Asia to Europe and South America—to impose new lockdowns.

Nevertheless, analysts said a resurgent virus is unlikely to temper the global rally, given the broad success of vaccine rollouts in much of the world.

“The fight against COVID-19 is far from over, but optimism abounds so much that the global economy is temporarily overheating as a consequence,” Sebastien Galy, at Nordea Investment Funds SA, said.

“The environment in the third quarter should still be supportive for risky assets, though fear of bouts of persistent inflation could alter this scenario. We expect to see bouts of volatility from this.” With AFP