Stocks bounce back; ICTSI, GMA Network lead gainers

The stock market bounced back Wednesday on declining COVID-91 infections in the country that could prompt looser lockdown restrictions in the capital region.

The Philippine Stock Exchange Index rose 48.75 points, or 0.7 percent, to 6,934.11 on a value turnover of P9.9 billion. Losers, however, beat gainers, 109 to 85, with 49 issues unchanged.

GMA Network Inc., the biggest broadcasting company, climbed 3.6 percent to P15.96, while International Container Terminal Services Inc. of tycoon Enrique Razon Jr., the biggest port operator, advanced 2.5 percent to P200.

Noodles maker Mondi Nissin Corp., however, fell 4.3 percent to P17.82, while Aboitiz Power Corp. shed3.6 percent to P29.80.

Meanwhile, Asian markets mostly fell Wednesday following a rout on Wall Street as investors fret over surging inflation, the end of the Federal Reserve’s financial support and a standoff in Washington that could end with a catastrophic US debt default.

Ongoing worries about the potential collapse of Chinese property giant Evergrande, an energy crunch in China and the ever-present specterof the Delta coronavirus variant also dragged the mood down on trading floors.

Tokyo tanked more than two percent, having enjoyed a strong run in recent weeks on hopes for more stimulus from a new Japanese prime minister.

The ruling party elected former foreign minister Fumio Kishida its new leader Wednesday, putting him on course to take the mantle of Yoshihide Suga.

Shanghai, Sydney and Seoul lost more than one percent with Taipei down 1.9 percent. There were also losses in Wellington, Mumbai and Bangkok.

However, Hong Kong, Singapore and Jakarta rose.

After a year and a half of ultra-loose monetary policy from the Fed and other central banks—helping fire a global economic recovery and send equities to record or multi-year highs—officials have signaled they are ready to take away the punch bowl.

While broadly expected, the decision comes as inflation continues to surge owing to supply chain problems as well as a spike in energy costs—Brent crude broke $80 for the first time in three years on Tuesday.

The Fed last week indicated it would start winding down its massive bond-buying program by the end of the year, while a gauge of future interest rates suggested a hike could come before 2023.

The news was initially taken in stride, but a surge in Treasury yields this week has sparked panic that the Fed could tighten much earlier and quicker than initially thought as inflation takes off.

The dollar largely held on to recent gains as higher yields make the currency more attractive to investors.

This has led to talk of a possible period of damaging “stagflation,” where inflation surges but economic growth remains subdued.

The Nasdaq led a sharp sell-off in New York with tech firms more susceptible to higher rates as they borrow cash to fuel growth.

“What we got here is a stock market that finally looks vulnerable as Treasury yields surge, oil prices look like they could easily hit $90 a barrel, and as supply chain issues show no signs of easing,” said OANDA’s Edward Moya. With AFP