Market drops; SM Prime, Megaworld lead decliners

The stock market retreated Thursday on profit taking to snap a three-day rally, on renewed worries  about the fast-spreading Delta coronavirus variant in the country.

The Philippine Stock Exchange Index slipped 37.94 points, or 0.6 percent, to 6,547.27 on a value turnover of P4.8 billion. Losers beat gainers, 108 to 80, with 34 issues unchanged.

SM Prime Holdings Inc. of the Sy Group, the biggest operator of shopping malls, fell 3.2 percent to P32.95, while Megaworld Corp., the largest lessor of office spaces, also dropped 3.2 percent to P2.71.

Major property developer Ayala Land Inc. of the Ayala Group declined 2.4 percent to P32.50, but sister unit AC Energy Corp. rose 3.1 percent to P8.74.

Meanwhile, Asian markets mostly fell Thursday following a tepid Wall Street lead as traders contemplated mixed US data and concerns about the fast-spreading Delta coronavirus variant and indications that the Federal Reserve could begin winding back its ultra-loose monetary policy by the end of the year.

Adding to selling pressure were concerns that China had the online gaming sector in its crosshairs next, after a crackdown on its tech, private tuition and property industries last month sparked turmoil.

After a soft lead from Wall Street, where the S&P 500 came off a record high, Asia struggled.

Hong Kong led the losses after a  report in China’s state-backed Securities Times said the government should end tax breaks for gaming companies as they have grown into global firms.

Hong Kong reversed early gains and went into negative territory with Tencent, which has been hammered by Beijing’s recent soundings, shedding more than three percent while Netease lost more than four percent.

There were also losses in Shanghai, Singapore, Seoul, Wellington, Taipei, Manila and Bangkok. Tokyo, Sydney, Mumbai and Jakarta rose.  

News that more than 200 million people had now been infected with virus in just over 18 months highlighted the huge battle governments face in bringing the pandemic under control, with the uneven rollout of COVID-19 vaccines raising concerns about the worldwide recovery.

The key headache now is the highly transmissible Delta strain, which is forcing some governments to reimpose lockdowns or other containment measures, blurring the economic outlook.

A major concern is the spike in cases in China, the world’s second-biggest economy and major global growth driver, which some economists warn could put a big dent in its annual growth.

US officials on Thursday indicated that the variant’s spread could be affecting the jobs market.

Data by payroll services firms showed US private hiring in July came in at 330,000, the weakest since February, while also less than half the previous month and well below expectations.

“The labur market recovery continues to exhibit uneven progress, but progress nonetheless,” ADP  chief economist Nela Richardson  said.

“Bottlenecks in hiring continue to hold back stronger gains, particularly in light of new COVID-19 concerns tied to viral variants.”

The figures gave investors reason to think ahead of Friday’s government employment report, which some analysts had forecast to show a gain of as much as a million jobs. With AFP