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Market drops; AC Energy, URC lead losers

Stocks retreated Wednesday on another bout of profit taking and lingering worries about the impact of a spike in coronavirus infections around the world.

The Philippine Stock Exchange Index slumped 107.16 points, or 1.5 percent, to 7,001.51 on a value turnover of P14.1 billion. Gainers beat losers, 120 to 97, with 40 issues unchanged.

AC Energy Philippines Inc., the energy unit of conglomerate Ayala Corp., tumbled 8.9 percent to P6.01, while MerryMart Consumers Corp., the supermarket chain owned by businessman Edgar Sia II, fell 7.2 percent to P5.80.

Universal Robina Corp., the biggest snack food maker owned by the Gokongwei Group, dropped 3.5 percent to P142.10, but DMCI Holdings Inc. of the Consunji Group rose 2.8 percent to P5.57.

The rest of the Asian markets were mixed Wednesday as an early rally fizzled out on profit-taking.

Regional investors rushed out of the blocks in the morning following a blockbuster performance on Wall Street, as vaccine successes and easing US political uncertainty boosted investor confidence in the economic recovery.

Signs that infection rates in Europe are slowing enough to allow some countries to ease lockdown measures added to the sense of hope across trading floors.

However, excitement was tempered by a still-high number of new cases and deaths, as well as a pick-up in several Asian nations that are causing governments to reimpose containment measures.

Hopes for a worldwide rollout of a vaccine were given an extra lift Tuesday when Russia said its Sputnik V drug had shown to be 95 percent effective, making it the fourth that could be available soon after similar positive announcements from Pfizer/BioNTech, Moderna and AstraZeneca.

The breakthroughs come as political uncertainty appears to be waning in Washington after government officials began the crucial transition process paving the way for Joe Biden to enter the White House.

While he still denies losing the November 3 election, Donald Trump’s decision to sign off on the move by the General Services Administration was effectively an admission of defeat.

Investors were also upbeat about Biden’s cabinet picks so far, particularly former Federal Reserve boss Janet Yellen’s nomination as treasury secretary, with optimism she can work well with current central bank head Jerome Powell.

Wall Street’s three main indexes ended more than one percent higher Tuesday, with the Dow closing above 30,000 for the first time and the S&P 500 also notching up a record.

The rally initially carried on in Asia, but traders lost momentum as the day wore on.

Tokyo, Hong Kong, Sydney, Wellington and Bangkok rose but Shanghai, Singapore, Seoul, Taipei, Jakarta and Mumbai were all in the red.

Ilya Spivak, strategist at DailyFX, said attention was now on the release later in the day of minutes from the Federal Reserve’s most recent policy meeting earlier this month, describing it as “a big event risk.”

“Markets don’t seem keen on follow-through. The worry is that the Fed will continue to signal that they’re keeping to a hands-off posture. No tightening, but no new easing either,” he added. With AFP

Topics: Stock Market , Philippine Stock Market , PSE , Philippine Stock Exchange Index , PSEi , global stock market , AC Energy Philippines Inc. , Universal Robina Corp.
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