Stocks retreated Tuesday from a 10-month high, as Asian markets fell across the board after surging virus infections forced governments to impose tighter containment measures, trumping the rollout of vaccines.
The Philippine Stock Exchange index, the 30-company benchmark, dropped 53 points, or 0.7 percent, to close at 7,227.74.
The broader all-share index also lost 17 points, or 0.4 percent, to settle at 4,321.01, on a value turnover of P10 billion. Losers outnumbered gainers, 128 to 95, while 49 issues were unchanged.
Five of the 20 most active stocks ended in the green, led by Apollo Global Capital Inc. which surged 24.7 percent to P0.091. Bank of the Philippine Islands rose 1.2 percent to P83.00, while BDO Unibank Inc. gained 0.9 percent to P114.50.
Most Asian stocks ended lower Tuesday. The downbeat mood also comes despite some optimism that US lawmakers are inching towards finally agreeing a new stimulus for the world’s top economy.
Investors have taken a breather this month after November’s spectacular rally powered by the news of vaccines being shown to be effective, and Joe Biden’s election victory.
“Signs of market fatigue are more prevalent today than a month ago, even as the popular average is near all-time highs,” Paul Nolte, at Kingsview Investment Management, said in a note.
“The much-awaited correction could come as investors tire of Washington, worry about the Covid cases over the holidays, or some other concern that is likely to pass in a few months.”
While the US on Monday began inoculations, its death toll hit 300,000 and analysts warned that while there is light at the end of the tunnel, there was still a lot of pain ahead.
Soaring case numbers have forced leaders to reimpose measures to stop the disease spreading, with New York City Mayor Bill De Blasio saying a “full shutdown” could be announced soon.
That comes as countries around the world struggle to get a grip on the crisis.
London faces new tough restrictions, following the rest of Britain into the highest tier of containment, while the Netherlands was preparing to enter its strictest lockdown since the pandemic began.
Turkey, France and Germany were also imposing tougher measures ahead of the Christmas holiday.
The Dow and S&P 500 both fell on Wall Street but the Nasdaq rose as tech firms benefit from people being forced to stay home.
Asia fared no better, with Tokyo, Hong Kong, Shanghai, Sydney, Seoul and Singapore leading losses across the region.
There was little movement from news that China’s economy continued to improve last month, with retail sales and industrial output growing in line with expectations.
Traders continue to monitor talks on a fresh US rescue package on Capitol Hill after a bipartisan group of lawmakers put forward a proposal they hope will break a months-long deadlock.
Senators put forward two plans: a $748-billion bill with almost $300 billion in aid for small business, $300 a week in extra unemployment benefits and money for vaccine distribution; and another worth $160 billion for state aid and liability provisions for companies.
The second part aims to settle the two key sticking points that have kept Democrats and Republicans from making a deal.
“We have people hurting right now. We have an emergency, so let’s do what we need to do to take care of the emergency,” Republican Senator Mitt Romney said in a news conference, announcing the plans.
However, it is not known if the bill has the support of Donald Trump and Republican Senate Majority Leader Mitch McConnell.
And Axi strategist Stephen Innes warned: “Unless policymakers over-deliver on market expectation, especially at this time of year when our risk-taking proclivities give way to profit-taking, it seems virus-related economic restrictions will never cease to weigh as the market continues to straddle that fence between hope and reality.”
The pound was holding up as British and European Union negotiators pressed ahead with talks on a trade deal with just over two weeks until the December 31 deadline.
An EU diplomat said lead negotiator Michel Barnier had spoken of a “narrow path” to a trade deal with London, while the bloc’s chief Ursula von der Leyen said: “There is movement. That is good.”
Sterling rallied Monday after the two sides agreed to talk past a self-imposed Sunday deadline and “go the extra mile” for a pact, though British Prime Minister Boris Johnson has warned there is a very good chance they will not reach an agreement.
“With the Irish foreign minister Simon Coveney saying that a deal was 90 percent done it would be absolutely extraordinary if the deal were to founder on the remaining 10 percent, but as with anything the devil is in the detail,” said Michael Hewson at CMC Markets. With AFP