Stocks flat; AC Energy and Security Bank slip

The stock market closed virtually flat Thursday as nervous investors stayed on the sidelines amid soaring daily COVID-19 cases in the country.

The Philippine Stock Exchange Index slipped 5.88 points, or 0.08 percent, to 7,085.52 on a value turnover of P5.2 billion. Losers, however, overwhelmed gainers, 114 to 57, with 59 issues unchanged.

AC Energy Corp. of the Ayala Group fell 4.5 percent to P9.65, but sister unit and major property developer Ayala Land Inc. rose 3.4 percent to P34.90.

Security Bank Corp., the eighth biggest lender in terms of assets, dropped 3.5 percent to P109, while SM Prime Holdings Inc. of the Sy Group declined 2.5 percent to P33.50.

Meanwhile, tech firms led losses across most markets Thursday following a painful sell-off in New York fueled by bets that the Federal Reserve will embark on an aggressive campaign against soaring inflation by hiking interest rates several times.

The much-anticipated release of minutes from the US central bank’s December policy meeting showed that while officials were concerned about the fast-spreading Omicron coronavirus variant, they were confident the world’s top economy was in rude health and able to absorb high borrowing costs.

The Federal Open Market Committee has already started winding back the vast bond-buying stimulus put in place at the start of the pandemic as price rises remain stubbornly high, with the program due to end in March.

Traders had widely expected the bank to then start lifting rates.

Policymakers had said they would not remove their support until the Fed was happy it had unemployment tamed and inflation was running persistently hot. Both appear to have been achieved or close to it.

Now officials are ready to act, with the Fed minutes saying: “It may become warranted to increase the federal funds rate sooner or at a faster pace than participants had earlier anticipated.”

The move away from massive central bank support around the world, particularly from the Fed, has rattled markets in recent months—having notched up a series of records or multi-year highs on the cheap cash.

With the punch bowl being taken away, traders are in retreat, particularly those invested in tech firms, which are more susceptible to higher interest rates owing to their reliance on borrowing to fuel growth.

On Wall Street, the Nasdaq plunged more than three percent, while the Dow and S&P 500, which both started the week with new records, lost more than one percent.

And Asia tracked the selling. Tokyo led losses, falling almost three percent, while Sydney was off almost as much. Seoul, Wellington, Bangkok and Mumbai gave up more than one percent each.

Shanghai, Taipei, nd Jakarta were also down.

Tech firms were among the worst-hit.

In Japan, Sony dived 6.9 percent and Tokyo Electron more than three percent, while Kakao Corp fell 5.2 percent in Seoul.

However, Hong Kong rallied in late trade to end up, with many of its tech firms enjoying some much-needed bargain-buying, though worries over Beijing’s crackdown on the sector continued to haunt traders. With AFP