Stock market drops slightly; BDO and Puregold decline

Stocks fell again Monday as investors took a breather following a recent rally, with some investors waiting on the sidelines for any signs of a market uptick.

The Philippine Stock Exchange Index slipped 35.02 points, or 0.5 percent, to 7,203.44 on a value turnover of P10.4 billion. Losers beat gainers, 137 to 95, with 43 issues unchanged.

BDO Unibank Inc., the biggest lender in terms of assets, declined 2.2 percent to P109.50, while Puregold Price Club Inc. of retail tycoon Lucio Co dropped 1.4 percent to P37.75.

Basic Energy Corp., however, surged 30.1 percent to P1.86, while Abra Mining & Industrial Corp. jumped 49 percent to P0.0076.

The rest of Asian markets fell Monday, though Hong Kong and Shanghai enjoyed gains after data showed China’s economy grew more than expected last year.

While broadly welcomed on trading floors, Joe Biden’s $1.9-trillion stimulus proposal was unable to fuel fresh gains with the spending spree largely factored into prices, while analysts warned it could be watered down by the time it reaches his desk for signing.

Concern about a frightening spike in new virus cases was also keeping a lid on buying sentiment as governments are forced to impose fresh lockdowns while battling to roll out vaccines.

However, the general consensus remains upbeat for the long-term outlook.

“Markets needed a breather or even a pull back to justify reflationary expectations,” Ben Emons, at Medley Global  Advisors, said.

Tokyo, Sydney, Seoul, Singapore, Taipei, Mumbai and Wellington led losses following a negative lead from Wall Street.

“After the early week exuberance of the first week of 2021, investor appetite for risk has taken a little bit of a knock in the last week or so, largely down to concerns that the recovery story being priced in may well be a little premature,” said Michael Hewson at CMC Markets.

“It probably hasn’t helped that expectations of a shock and awe Democrat fiscal plan, are also starting to get pared back a touch as well, as details of the new $1.9-t fiscal aid plan start to come into clearer focus.”

However, stocks in Hong Kong and Shanghai rose after official figures showed China’s economy expanded a forecast-beating 2.3 percent last year. While the reading was the weakest in four decades, it showed growth was picking up again after a devastating start to 2020 as swathes of the country were shut down to contain the deadly coronavirus.

Focus will now turn to Biden’s inauguration on Wednesday and hopes that his massive spending plan can get through Congress, with worries that a Senate impeachment trial of Donald Trump could snarl up its progress as well as cabinet confirmation hearings.

But Axi strategist Stephen Innes said: “The  final package will ultimately be pared down significantly, which is adding a touch of uncertainty to the view.”

And National Australia Bank’s Rodrigo Catril added: “The underwhelming market reaction to Biden’s stimulus plan reflects the reality that at this stage this is just a proposal that needs to find support in Congress, potentially requiring time, a few political debates and several pieces of legislation.” With AFP

Topics: Stock Market , Philippine Stock Market , PSE , Philippine Stock Exchange Index , PSEi , global stock market , BDO Unibank Inc. , Puregold Price Club Inc.
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