Stock market surges; ICTSI and GT Capital lead gainers

The stock market surged Friday, boosted by a lower-than-expected inflation rate in October and further easing of lockdown measures in the capital region.

The Philippine Stock Exchange Index jumped 137.05 points, or 1.9 percent, to 7,340.77 on a value turnover of P9.4 billion. Gainers overwhelmed losers, 137 to 67, with 44 issues unchanged.

The inflation rate in October eased to a two-month low of 4.6 percent from 4.8 percent a month ago, pulled down mainly by lower annual increases in the prices of food and non-alcoholic beverages, the Philippine Statistics Authority said Friday.

International Container Terminal Services Inc. of tycoon Enrique Razon Jr., the biggest port operator, advanced 5.2 percent to P187.30, while GT Capital Holdings Inc. of the Ty Group climbed 4.6 percent to P585.

SM Prime Holdings Inc. of the Sy Group rose 4.2 percent to P36, while grocery chain AllDay Marts Inc. of the Villar Group increased 4 percent to P0.77.

The rest of  Asian markets were mixed Friday following the previous day’s gains, with eyes on the release of key US jobs data later in the day, while investors are also assessing the outlook for central bank monetary policy in the face of surging inflation.

Wall Street enjoyed another record, with tech firms the main beneficiaries as they are more susceptible to higher borrowing costs.

The S&P 500 and Nasdaq both chalked up new highs for a fifth straight day, though the Dow dipped.

However, Asian investors struggled to pick up the baton. Hong Kong led the selling, with traders keeping a nervous eye on developments in the China Evergrande saga with a deadline Saturday for it to make an overdue payment on a bond.

Another hugely indebted property firm, Kaisa, suspended trading its shares in the city Friday as it battles to find cash to meet its own obligations.

Tokyo, Shanghai, Bangkok, Jakarta, and Seoul also fell.

There were gains in Sydney, Singapore, Wellington, and Taipei.

Equities around the world enjoyed a healthy run-up Thursday after the Federal Reserve finally announced its plan for tapering the vast bond-buying program that has provided crucial support since it was put in place at the start of the pandemic.

The news removed a lot of uncertainty about officials’ response to a spike in inflation that is expected to last a lot longer than previously thought, and follows moves in other countries to step back from their ultra-easy measures as the world economy recovers. With AFP

However, the Bank of England’s decision Thursday not to lift rates shocked traders, who had taken recent indications from boss Andrew Bailey that it would do so.

While its board signaled a rise was still on the cards in the coming months, it raised questions about how quickly the financial leaders would tighten policy, with forecasts for the Fed’s own hiking timeline put back.

Bond yields, which indicate future pricing for interest rates, sank after the announcement and raised concerns about further uncertainty, particularly as inflation remains doggedly high owing to supply chain snarls, high commodity prices, and wage growth. That has fueled talk of a period of stagflation when prices surge but economic growth stalls. With AFP