Market climbs; AC Energy, Monde Nissin lead gainers

The stock market rose Monday on bargain hunting ahead of the release of the gross domestic product figures in the second quarter today.

The Philippine Stock Exchange Index advanced 92.66 points, or 1.4 percent, to 6,632.57 on a value turnover of P6.4 billion. Gainers beat losers, 115 to 91, with 34 issues unchanged.

Major noodle maker Monde Nissin Corp. climbed 6.9 percent to P16.78, while property developer Ayala Land Inc. of the Ayala Group increased 4.6 percent to P33.80.

SM Prime Holdings Inc. of the Sy Group, the biggest mall operator, gained 3.8 percent at P33.90, while AC Energy Corp., a unit of Ayala Corp., rose 2.4 percent to P9.37.

Most Asian markets, meanwhile, rose Monday but investors remained cautious as a forecast-beating US jobs report reinforced optimism about the economic recovery while also fanning speculation the Federal Reserve could begin tapering monetary policy this year.

Spiking infections around the world from the Delta coronavirus variant are also jangling nerves and hammering oil prices as governments reassess their growth outlooks with some—including China—forced to reimpose lockdowns and other containment measures.

Data from the United States on Friday showed the world’s biggest economy created 943,000 new jobs in July, while the June reading was also revised higher to more than 900,000.

Still, US investors were broadly upbeat, with the Dow and S&P 500 ending at all-time highs, though the Nasdaq slipped with tech firms more sensitive to higher rates.

And Asian investors mostly took up the baton, though early rallies fizzled.

Hong Kong, Shanghai, Mumbai, Kuala Lumpur, and Bangkok rose but Seoul, Wellington, Taipei, and Jakarta slipped while Sydney was flat.

Tokyo and Singapore were closed for holidays.

The employment data news provided some much-needed reassurance that the rebound was still on track despite Delta’s spread.

However, it also renewed concerns that in a bid to prevent overheating, the Fed will start to wind down the ultra-loose policies—including record-low interest rates and a vast bond-buying scheme—that have been integral to an equity market rally since April last year.

The bank has continuously stressed that it will maintain its accommodative stance for as long as the economy needs to recover, but with inflation at multi-year highs and jobs returning, it is coming under increasing pressure to act.

“You have these concerns that if the economy is growing very, very strongly then that might bring forward the tightening or the tapering by the Fed,” Shane Oliver, at AMP Capital, told Bloomberg Television. 

“There is a good chance they might announce that tapering in September and it would start later this year.”

National Australia Bank’s Rodrigo Catril added: “Overall, there is not a lot of disagreement on a taper announcement coming sometime between September-December followed by actual tapering sometime between November and January.” With AFP