Market declines; PLDT, Globe Telecom advance

Stocks fell Thursday on mild profit taking ahead of an announcement from President Rodrigo Duterte today about major changes in government’s tack to battle COVID-19 in the face of rising infections.

The Philippine Stock Exchange Index dropped 37.82 points, or 0.6 percent, to 5,928.45 on a value turnover of P5.1 billion. Gainers, however, beat losers, 114 to 78, with 47 issues unchanged.

Aboitiz Equity Ventures Inc., the holding company of the Aboitiz Group, declined 2.9 percent to P48.05, while BDO Unibank Inc., the biggest lender in terms of assets, shed 2.8 percent to P88.

PLDT Inc., the largest telecommunications firm, however, rose 1.8 percent to P1,340, while rival Globe Telecom Inc. climbed 2.2 percent to P2,064.

The rest of Asian equities were mixed Thursday after the Federal Reserve pledged to provide as much support as necessary for the US economy, with early gains reversed by fears a fresh wave of virus infections could push the global recovery off track.

While the central bank did not unveil any new measures and broadly met expectations, analysts said it instilled some much-needed confidence that the Fed had their back.

Bank boss Jerome Powell said the Fed had noted the spike in new US cases was denting economic activity and warned the downturn was “the most severe of our lifetimes,” while adding recovery depended on staunching the virus so Americans could go out and spend again.

The policy board repeated its intention to hold rates near zero “until it is confident that the economy has weathered recent events and is on track to achieve its maximum employment and price stability goals.”

Observers said focus now turns to the next policy meeting in September, which could see more measures unveiled.

That was enough to give a boost to equities, which have struggled in recent weeks on concerns about the spread of coronavirus around the world and containment measures that have been re-introduced in some countries.

Wall Street’s three main indexes saw healthy gains which were followed by Asia in the morning, but the advance fizzled as the day wore on.

Hong Kong and Tokyo slipped 0.3 percent, Shanghai shed 0.2 percent and Singapore shed more than two percent”•owing to a sharp drop in banks after the country’s regulator called on them to cap dividend payments.

Bangkok was also down.

But Sydney and Mumbai added 0.7 percent, while Taipei put on more than one percent and Jakarta and Wellington were also higher.  

“It wasn’t exactly the most riveting (policy meeting) of recent times after the Fed let the cat out of the bag late Tuesday pledging to extend its emergency programs,” said Stephen Innes at AxiCorp.

But the meeting “still managed to dot I’s and cross the T’s and out-dove even the market’s most dovish expectations”, he added.

“Investors liked what they heard from Chair Powell. This is a Fed that appears to feel the pulse of the economy, even despite the meeting coming in line with expectations and offering no new policy announcements.”

But, while traders have a mountain of cash from governments and central banks around the world backing them up, the disease continues to dominate as the US death toll topped 150,000 and Australia’s state of Victoria noted a record number of new infections.

The grim readings highlight the overriding need for a vaccine. With AFP