The stock market retreated Wednesday as the delay in the arrival of COVID-19 vaccines in the country dampened hopes for a quick economic recovery.
The Philippine Stock Exchange Index fell 58.72 points, or 0.9 percent, to 6,755.95 on a value turnover of P14.7 billion. Losers overwhelmed gainers, 174 to 58, with 37 issues unchanged.
President Duterte on Monday rejected the proposal of the country’s economic team to place the entire country under the looser modified general quarantine until the government starts the rollout of COVID-19 vaccines.
DITO CME Holdings Corp., the third major telecommunications firm, slumped 10.1 percent to P16, while MerryMart Consumer Corp., the supermarket chain owned by businessman Edgar Sia II, dropped 4.4 percent to P6.72.
Magnetite miner Apollo Global Capital Inc. declined 7.3 percent to P0.255, while AC Energy Corp., a unit of conglomerate Ayala Corp., fell 3.1 percent to P7.22.
The rest of Asian markets suffered fresh losses Wednesday as concerns about rising inflation and frothy equity prices continued to sap confidence, with investors unmoved by reassurances from Federal Reserve boss Jerome Powell that officials would maintain record-low interest rates for as long as needed.
Hong Kong led Asia’s losses as it tanked three percent after the city’s financial secretary said he would lift stamp duty on stock trades—the first in 28 years—in his budget as the government looks to tighten its belt. Bourse operator HKEx collapsed more than 12 percent at one point before slightly recovering.
Tokyo, Shanghai, Sydney, Seoul, Wellington, Taipei, Jakarta, and Bangkok all saw significant losses, with technology firms taking the brunt of the selling.
Global stock indexes have cruised to all-time or multi-year highs in recent months thanks to government and central bank backing, the rollout of vaccines, easing of lockdowns, Joe Biden’s imminent stimulus, and falling infection rates.
But the rally is showing signs of fatigue as traders fret that valuations may have run ahead of themselves, while the yield on benchmark 10-year Treasury bonds—a key red flag on inflation—has spiked.
That has led to worries the Fed will have to lift borrowing costs more quickly than expected, removing a key pillar of support for stocks.
Powell sought to soothe those concerns Tuesday in the first of two congressional testimonies, saying inflation was expected to pick up and be “volatile” this year as Americans begin to spend more but told lawmakers the increases were unlikely to be large or persistent.
He pledged to keep the bank’s vast bond-buying scheme and low rates in place “until substantial further progress has been made toward our goals” of two percent inflation and full employment.
He added that the rise in yields showed “confidence on the part of markets that we will have a robust and ultimately complete recovery.”
US inflation had averaged less than two percent over the past 25 years, he said.
His comments helped Wall Street bounce off intra-day lows, with the Dow and S&P 500 ending slightly higher. But the Nasdaq fell as tech firms that rely more heavily on financing are most at risk from high-interest rates. With AFP