The stock market sank Thursday along with the rest of Asia on further profit taking, with blue chips leading decliners.
The Philippine Stock Exchange Index slumped 116.79 points, or 1.7 percent, to 6,849.64 on a value turnover of P8.9 billion. Losers edged gainers, 113 to 109, with 39 issues unchanged.
SM Prime Holdings Inc. of the Sy Group fell 3.9 percent to P35.80, while Universal Robina Corp., the biggest snack food maker, dropped 3.3 percent to P135.40.
International Container Terminal Services Inc. of tycoon Enrique Razon Jr. declined 2.4 percent to P119.10, but Metropolitan Bank & Trust Co., the second-largest lender in terms of assets, climbed 5.8 percent to P51after it declared a special cash dividend of P3 per share, in addition to the regular dividend of P1 apiece.
Asian markets, meanwhile, mostly fell Thursday on profit-taking and growing worries about inflation, which offset long-running optimism about the global recovery as vaccines are rolled out, infection rates slow and Joe Biden’s stimulus winds through Congress.
Oil prices pushed further up to 13-month highs as the severe cold snap in the United States hammers production, even trumping news that Saudi Arabia is planning to up output in light of the commodity’s strong performance in recent months.
While the Dow edged to another record high, the S&P 500 and Nasdaq both dipped.
Asian markets struggled. Tokyo, Singapore, Seoul, Wellington, Mumbai and Bangkok all fell, with Hong Kong more than one percent off after a seven-day run-up.
Shanghai rose as it reopened after a week-long holiday, while Taipei and Jakarta also rose and Sydney was barely moved.
Confidence that the world economy will enjoy a scorching rebound from last year’s collapse has fired global equities and other risk assets for months as immunization programs allow people to slowly get back to a semblance of normality and lockdowns are eased.
Underpinning that has been vast amounts of government spending as well as ultra-loose central bank monetary policies and pledges of continued support until the recovery is well underway.
But that has led to expectations of a surge in inflation and a spike in US Treasury yields to around one-year highs, sparking worries of higher borrowing costs down the line.
And it is these fears, along with warnings equities may have run ahead of themselves, that are playing on investors’ minds.
Those concerns were allayed by a forecast-beating jump in US retail sales last month, and wholesale inflation climbed at its fastest pace since the index was revamped in December 2009.
“Strong US economic data dampened the argument that the economy still needs massive stimulus and as rising inflation expectations start to weigh on valuations,” said OANDA strategist Edward Moya.
“Technology stocks are leading the decline as pricing pressures will likely have the biggest impact on their bottom line. The skyrocketing move in yields is triggering some investors to take off some of their most profitable frothy trades.”
Still, observers said the surprise jump would be unlikely to shift the Federal Reserve from its course as the economy continues to be threatened by the pandemic and is “far from” achieving growth and employment goals. With AFP