Stocks slumped Monday on profit taking and after senators cautioned against a push by government officials to ease quarantine restrictions.
The Philippine Stock Exchange Index fell 116.07 points, or 1.7 percent, to 6,810.34 on a value turnover of P8.5 billion. Losers beat gainers, 116 to 96, with 44 issues unchanged.
Majority of Metro Manila mayors earlier said they would recommend dropping to the less restrictive modified general community quarantine by March to the Inter-Agency Task Force for the Management of Emerging Infectious Diseases as a way to revive the economy.
Conglomerate Ayala Corp. dropped 4.6 percent to P760, while PLDT Inc., the biggest telecommunications firm, declined 3 percent to P1,305.
SM Investments Corp. of the Sy Group decreased 2.9 percent to P1,034, but Nickel Asia Corp., the largest nickel producer, advanced 8 percent to P6.32.
Asian markets, meanwhile, mostly fell Monday as falling infection rates and more good news on the vaccine front were overshadowed by growing worries about high valuations and inflation.
While the United States is approaching 500,000 deaths, there is optimism that there is light at the end of the tunnel in the COVID-19 crisis as governments embark on immunization programs that will allow economies to reopen.
Expectations that President Joe Biden’s vast stimulus will be passed next month are also keeping spirits up, as a raft of data last week on factory and services activity indicated the financial hit to the United States and Europe might not be as bad as feared.
News that the Pfizer/BioNTech jab appeared to prevent nine in 10 people from getting the disease in Israel—which is the most advanced in its rollout—provided a positive background. Israeli officials also said the shot was 99 percent effective at preventing deaths from the disease.
Meanwhile, hopes for a wider distribution were given a lift after Pfizer said its drug could be stored in normal medical freezers instead of the ultra-cold conditions initially thought necessary.
Shanghai and Hong Kong led losses, shedding more than one percent as the Chinese central bank sucked cash out of financial markets to ease bubble concerns. Sydney, Seoul, Wellington, Mumbai and Bangkok also fell, though there were gains in Tokyo, Singapore, Taipei and Jakarta.
The rally that has characterized the past few months looks to have come to a halt as traders fret that prices may have become a little too frothy.
There is growing concern that the expected recovery and Biden’s spending package will fire a surge in inflation, which could force the Federal Reserve to wind back the loose monetary policies and record-low interest rates that have been a key pillar of a near-year-long market surge.
“The Biden administration continues to stay on message stressing Congress’s need to pass a significant fiscal package, downplaying recent more robust economic data as… a package exceeding $1.9 trillion heads for a House vote this week,” said Axi strategist Stephen Innes. With AFP