Stocks close flat; Manila Water rises

The stock market closed virtually flat Monday despite a record-smashing lead from Wall Street, ahead of a week of major monetary policy announcements around the world.

The Philippine Stock Exchange Index added 5.44 points, or 0.08 percent, to 7,197.61 on a value turnover of P6.6 billion. Losers, however, edged gainers, 96 to 93, with 57 issues unchanged.

Manila Water Co. Inc., a unit of conglomerate Ayala Corp., advanced 4.6 percent to P26.35, while sister firm Bank of the Philippine Islands, the fourth-biggest lender in terms of assets, rose 3.1 percent to P93.50.

AllDay Marts Inc., the grocery chain owned by the Villar Group, however, slumped 7.4 percent to P0.63, while fiber broadband services provider Converge ICT Solutions Inc. fell 5 percent to P31.25

The rest of Asia stocks held steady on Monday. In Hong Kong, the Hang Seng Index was down 0.17 percent at the close, while Tokyo’s benchmark Nikkei 225 index closed up by 0.71 percent.

Friday’s gains on Wall Street, where the S&P 500 piled on more than 0.9 percent to finish at 4,712.02, eclipsed a record from last month—and came despite figures showing the consumer price index jumped 6.8 percent in November.

The rise in inflation suggests a tapering in the US Federal Reserve’s ultra-loose monetary policy will come sooner rather than later—a change that markets have been nervously awaiting for months.

Fed chair Jerome Powell—who will update the markets this week following a two-day policy meeting—had already signaled plans to accelerate the tapering of stimulus payments. Many analysts expect the central bank to hike interest rates at least twice in 2022.

But traders took the data in their stride, in part because the inflation was largely expected.

In Asia Monday, Singapore, Seoul and Taipei were marginally down, with Jakarta and Shanghai slightly up.

Wellington rose more than one percent.

In Tokyo, “the market is looking at the Bank of Japan’s Tankan” quarterly business survey, released 10 minutes before the opening bell, said senior market analyst Toshiyuki Kanayama of Monex. 

The latest survey showed Japan’s major manufacturers remain cautious about the economy’s trajectory, with business sentiment flat for the quarter as concerns about the pandemic linger.

Some investors may take a wait-and-see attitude ahead of the Fed meeting, analysts added.

“Global equities had a solid run last week and we’ll see if the goodwill lasts into what is a behemoth when it comes to event risk,” Chris Weston, head of research with Pepperstone Financial, wrote in a note.

The Fed, along with the latest on the Omicron variant of the coronavirus, should dictate sentiment, he added.

Michael Hewson, chief market analyst at CMC Markets UK, added: “For now, equity markets appear to be adopting a glass half full approach to recent events, even as US inflation came in at its highest levels in 39 years on Friday, amid a backdrop of increasing concern that central banks are massively behind the curve. With AFP