The stock market dropped Monday on profit-taking and government data showing a steep rise in the number of COVID-19 cases in the Philippines.
The Philippine Stock Exchange Index fell 44.25 points, or 0.7 percent, to 6,328.41 on a value turnover of P6.2 billion. Gainers and losers were even at 103 each, with 43 issues unchanged.
BDO Unibank Inc., the biggest lender in terms of assets, shed 2.4 percent to P97.50, while Metropolitan Bank & Trust Co., the second largest bank, declined 2.7 percent to P37.90.
Emperador Inc., the biggest liquor producer and a unit Alliance Global Group Inc. of tycoon Andrew Tan, slipped 2.5 percent to P7.80, but Manila Water Co. Inc., a unit of conglomerate Ayala Corp., advanced 8.6 percent to P14.82.
The rest of Asian markets rallied out of the blocks Monday, with further signs of economic recovery continuing to resonate with investors more than a surge in coronavirus infections across the planet.
The easing of lockdowns is providing hope the global economy will bounce back from an expected recession this year, with England’s pubs reopening at the weekend and tourist attractions around Europe now either open or planning to.
Shanghai led the gains, soaring more than five percent to a more than two-year high, while Hong Kong finished up 3.8 percent at levels not seen since early March.
Jeffrey Halley at OANDA said: “Hong Kong concerns are fading as fast as they began, as the new China-imposed security laws allow money to talk without the annoying interference of protestors.”
But he added that the “story still has more to run in a geopolitical context,” pointing out that Donald Trump was still to sign a bill censuring Chinese officials linked to the law, which would likely lead to retaliation by Beijing.
“The scale of those measures will dictate whether geopolitics will have more to say on global financial markets,” he said in a note.
Tokyo piled on 1.8 percent, while Singapore, Seoul, Taipei and Mumbai were all more than one percent higher, with Wellington and Jakarta also up.
Better-than-forecast data on US jobs creation and factory activity have also provided a boost to confidence, as have hopes for a vaccine, which observers say is key to kickstarting any recovery.
Traders have piled back into stocks in a major way in recent months―with the help of vast government and central bank support―and analysts have suggested the gains are also being helped by a fear of missing out on the rally.
“The global economic data and positive coverage on potential COVID-19 vaccines and treatments represent a... whirligig of positive news that is overwhelming gnarly headline flows around the daily virus case counts in the US,” said AxiCorp’s Stephen Innes.
But there remains trepidation on trading floors as new infections spike around the world. AFP
Some US states are reporting record daily increases, with a number of officials considering reimposing lockdown measures, while Brazil and India are also seeing worryingly large rises.
And Australia said it would effectively seal off the state of Victoria from the rest of the country as authorities struggle to control a surge in cases. With AFP