Stock market down again; First Gen, Manila Water up

The stock market slipped Friday on continued profit taking, but select issues bucked the trend and sustained their climb on prospects of a strong economic recovery.

The Philippine Stock Exchange Index fell 44.4 points, or 0.6 percent, to 6,906.86 on a value turnover of P25 billion. Gainers, however, beat losers, 105 to 83, with 46 issues unchanged.

Fiber broadband services provider Converge ICT Solutions Inc. sank 10.4 percent to P33.60, while Globe Telecom Inc., the second-biggest telecommunications firm, dropped 4.7 percent to P3,088.

First Gen Corp. of the Lopez Group, however, advanced 5.1 percent to P29, while BDO Unibank Inc., the largest lender in terms of assets, rose 4.3 percent to P121. Manila Water Co. Inc. of the Ayala Group climbed 3.5 percent to P23.80.

Meanwhile, Asian markets mostly rose Friday after a global rally as US lawmakers voted to avert a catastrophic debt default, while attention now turns to the release of key jobs data later in the day that could determine the Federal Reserve’s plans for tapering monetary policy.

An advance in mainland Chinese stocks also provided some solace as the country reopened after a week-long break, with investors keenly following developments in the crisis at troubled developer Evergrande.

News that Republicans had agreed to lift the US borrowing limit provided some much-needed relief to markets, which had been growing increasingly worried that the government would run out of cash in a few days and fail to meet its debt obligations.

Experts had warned such a scenario would have led to a historic default, plunging the world’s biggest economy into recession and causing a global financial crisis.

While the deal means there will only be enough cash to last until December—leaving open the possibility of another standoff within months—investors are happy to buy up some bargains after a recent run of hefty losses across global equities.

Tokyo, Hong Kong, Sydney, Singapore, Mumbai, Bangkok and Jakarta all rallied. But Seoul, Wellington and Taipei dipped.

Shanghai also put on a positive showing in the first day of trade since last Thursday, with investors keeping a close eye on moves in the Evergrande saga as it struggles under liabilities worth more than $300 billion. 

Concern now turns to the Fed’s plans to begin withdrawing its huge financial support measures put in place at the start of the pandemic, which have been key to a strong recovery in economies and markets.

The bank has indicated it will begin tapering by the end of the year but has not elaborated how quickly.

The release of non-farm jobs figures later Friday could be crucial in determining a timetable, with a strong showing ramping up expectations it will kick off next month.   

Analysts said the attention will then turn to when officials begin to lift interest rates.

The report comes days after data showed a forecast-beating jump in private jobs creation last month, while surging inflation—made worse by a rally in energy prices—is adding pressure on the Fed to act sooner rather than later. With AFP