The stock market sank Friday over worries the economic recovery may stall on further mobility restrictions as daily COVID-19 cases continue to pile up.
The Philippine Stock Exchange Index slumped 74.41 points, or 1 percent, to 7,011.11 on a value turnover of P5.8 billion. Losers overwhelmed gainers, 136 to 51, with 46 issues unchanged.
Puregold Price Club Inc. of retail tycoon Lucio Co fell 4.6 percent to P36.60, while Security Bank Corp., the eighth biggest lender in terms of assets, dropped 4.5 percent to P104.10.
AC Energy Corp. of the Ayala Group declined 3.3 percent to P9.33, while sister unit and major property developer Ayala Land Inc. decreased 3 percent to P33.85
The rest of Asian equities were mixed Friday as investors battled to instigate a recovery after this week’s volatile start to the new year, with the release of key US jobs data taking centre stage.
News that the Federal Reserve is planning a more aggressive campaign to fight surging inflation rattled global traders, who have enjoyed almost two years of cheap cash that has helped push some markets to record or multi-year highs.
The Fed’s decision to remove the support put in place at the start of the pandemic comes as the world’s top economy continues to show resilience, with unemployment falling, despite supply chain snarls and rising energy costs that sent prices soaring.
Minutes released Wednesday showed the positive view on the recovery led the US central bank to start hiking interest rates sooner and quicker than expected.
There were also indications officials were considering reducing its massive bond holdings, adding upward pressure to lending costs Treasury yields are set for their biggest weekly jump since 2020, according to Bloomberg News.
The minutes sent global markets plunging, with tech firms among the worst hit as they are more reliant on debt to fuel growth.
Wall Street extended losses Thursday, though the selling was less severe.
Asia fared a little better, with Hong Kong up 1.8 percent, and Sydney and Seoul rising more than one percent each, while Singapore, Mumbai, Bangkok, and Jakarta also rose. Tokyo pared early losses to end flat, with Shanghai, Wellington and Taipei lower.
“We knew coming into 2022 that the Fed was going to be a creator of volatility within the market and we’re seeing that right out of the gate at the start of the year,” Lindsey Bell, at Ally Invest, told Bloomberg News.
“The good news is that… things seem to be stabilizing a little bit after (the initial) knee-jerk reaction.”
Eyes are now on the release of the closely watched non-farm payroll figures for December, which could impact the Fed’s decision on when and how quickly to lift rates.
A figure way above the forecast 447,000 new posts could force officials to take a more hawkish tilt, which would likely weigh further on equities.
Crude markets built on their recent run-up this week—both contracts have added more than five percent since last Friday—as concerns about the impact of the fast-spreading Omicron COVID-19 variant fade, allowing traders to focus on the demand picture. With AFP