Stocks rise; Globe Telecom advances

The stock market rose Monday on select buying and declining COVID-19 cases in the country that could give the economy a lift in the last two months of the year.

The Philippine Stock Exchange Index added 51.31 points, or 0.7 percent, to 7,106.01 on a value turnover of P7.5 billion. Losers, however, beat gainers, 104 to 81, with 46 issues unchanged.

Globe Telecom Inc. of the Ayala Group, the second-biggest telecommunications firm, advanced 4.6 percent to P3,134, while SM Investments Corp. of the Sy Group climbed 4.2 percent to P1,005.

Semirara Mining and Power Corp. of the Consunji Group, the largest coal producer, however, sank 7.7 percent to P24 on profit taking, while parent DMCI Holdings Inc. dropped 4.4 percent to P7.60.

The rest of Asian stock markets mostly fell Tuesday as traders held back ahead of this week’s key central bank meetings that are expected to see officials begin withdrawing their vast pandemic-era financial support, while keeping a wary eye on inflation and supply chain snarls.

Another record close on Wall Street provided a fruitful lead thanks to a strong earnings season that has seen the vast majority of companies beat expectations despite concerns about the impact of surging input costs and spiking COVID infections in the third quarter.

However, a promising start in early trade gave way to selling as traders remain on edge about the outlook with Hong Kong and Shanghai weighed by the latest outbreak in China that has led authorities to reimpose strict containment measures.

Similar moves in the country earlier this year led to a sharp drop in economic activity and dragged growth down.

Hong Kong, Shanghai, Sydney, Tokyo, Wellington, Mumbai and Jakarta all fell while Taipei was marginally down. Singapore, Seoul and Bangkok edged up.

Still, analysts for now remain buoyant about the outlook for markets.

“We are now in the midst of an early ‘January effect’ and I expect that this will continue through Thanksgiving,” said markets strategist Louis Navellier.

“However, December is also a seasonally strong month and January is typically stronger, so we have three months of seasonal strength to look forward to.  

“In the meantime, we are still in the midst of wave after wave of better-than-expected third-quarter earnings announcements, so enjoy the ride.”

Attention now turns to the central banks’ policy meetings this week.

With several countries already starting to lift interest rates, traders are now preparing for the end of the cheap cash era, which has helped propel markets to record or multi-year highs.

On Tuesday the Reserve Bank of Australia said it would no longer artificially maintain low yields on three-year bonds, making it the latest to step back from its easy money strategy, while the Bank of England is tipped to hike borrowing costs on Thursday.

But the Federal Reserve’s Wednesday gathering is the main focus of attention. US authorities are forecast to start tapering their bond-buying program this month but observers said the board’s timeline on raising borrowing costs will be top of the agenda. With AFP