Market slumps; AC Energy retreats

The stock market sank Thursday over rising COVID-19 cases in the country that could slow down recovery after a robust economic performance in the second quarter.

The Philippine Stock Exchange Index slumped 110.29 points, or 1.6 percent, to 6,556.57 on a value turnover of P18.2 billion. Losers overwhelmed gainers, 133 to 66, with 51 issues unchanged.

AC Energy Corp., a unit of conglomerate Ayala Corp., dropped 4.3 percent to P8.82, while SM Prime Holdings Inc. of the Sy Group, the biggest shopping mall operator, fell 4.1 percent to P33.55.

Emperador Inc. of business tycoon Andrew Tan, the largest liquor maker, declined 3.9 percent to P12.24, while DITO CME Holdings Corp., the third major mobile phone company, retreated 3.3 percent to P7.83.

Asian markets, meanwhile, mostly fell Thursday after Chinese authorities unveiled plans to tighten regulation across multiple sectors over the coming years, weeks after it hit stocks by cracking down on a range of industries including tech firms.

Hong Kong and Shanghai fell, though OANDA’s Jeffrey Halley said the reason the losses were not so steep even after the latest news from China may be because “investors are being more accepting of the ‘new normal.”

Tokyo, Seoul, Wellington and Taipei also fell though there were gains in Sydney, Singapore, Mumbai and Jakarta.

The weak showing came despite a record lead from Wall Street, as traders assessed US figures showing a drop in inflation that eased some pressure on the Federal Reserve to start winding down its ultra-loose monetary policy soon.

Stocks had a largely positive start to the week after a recent run of pressure caused by concerns about the fast-spreading Delta variant as well as traders taking a breather after a long-running rally.

China’s crackdowns have also had a detrimental impact, and investors continue to keep an eye on Beijing for any new developments.

On Wednesday the country’s State Council signaled the government’s push to regulate sweeping parts of the economy would continue over the next five years.

A statement released jointly by the council and the Communist Party’s Central Committee said sectors including private tutoring, and food and drugs would see tougher legal enforcement, fueling concerns officials were not finished with moves to tighten their grip on the economy.

Ken Cheung Kin Tai, an analyst at Japan’s Mizuho Bank, said in a research note that “foreign investors will continue to reassess the outlook for Chinese investments under tighter regulations.”

And Graham Webster, who leads the DigiChina project at the Stanford University Cyber Policy Center, added: “We can’t draw too much insight about enforcement and the potential shape of crackdowns from one document or another.

“Much depends on what bureaucrats and their higher-ups land on in terms of priorities month after month.”

The Dow and S&P 500 finished at all-time highs on Wednesday, buoyed by data showing that while consumer prices rose significantly for energy and food in July, core inflation—which strips out energy and food costs—came in at 0.3 percent, just a third of the rate in June. With AFP