Share prices rose for the fourth straight day Wednesday as the government ramped up its vaccination drive against the coronavirus disease.
The Philippine Stock Exchange Index added 23.22 points, or 0.3 percent, to 6,942.76 on a value turnover of P34.1 billion. Losers, however, beat gainers, 125 to 101, with 40 issues unchanged.
DITO CME Holdings Corp., the third major telecommunications firm, rallied 4.4 percent to P15.72, while Bank of the Philippine Islands, the third-biggest creditor in terms of assets, advanced 3.3 percent to P88.80.
Basic Energy Corp. climbed 6.3 percent to P1.18, but Robinsons Retail Holdings Inc. of the Gokongwei Group fell 4.4 percent to P53.25.
The rest of Asian markets rose Wednesday following the previous day’s losses but investors remain on guard over a possible correction as concerns about asset bubbles and a surge in inflation continue to play against progress in fighting coronavirus.
Asian investors brushed off a Wall Street retreat to push higher Wednesday, with Hong Kong rallying 2.7 percent while Shanghai added two percent, with Seoul, Taipei, Mumbai and Bangkok all more than one percent up. Tokyo, Singapore, Wellington and Jakarta also rose.
Sydney was given extra support from data showing the Australian economy grew more than expected towards the end of last year.
News of more vaccines coming on line and being rolled out, the expected passage of Joe Biden’s stimulus package, slowing infection rates and easing lockdowns are contributing to the narrative that the global economy will see a burst of activity from the second half of the year.
But reflation expectations are causing a headache for investors, who fear the spending boom will send prices rocketing and force the Federal Reserve to hike interest rates—removing a key pillar of support for equities over the past year.
And this anxiety, compounded by a 12-month rally that has pushed equities to record or multi-year highs, has jolted markets recently.
Last week’s sell-off came on the back of rising US Treasury yields, an indication of rising interest rates, and while the bond market has steadied this week traders remain cautious.
Hopes for a quick bounce back were boosted Tuesday when the White House said it would have enough shots to immunize every adult by the end of May, two months earlier than first thought.
But “so are the market’s inflation expectations,” said Axi strategist Stephen Innes. “And despite vaccine optimism trying to provide a booster shot to risk sentiment, it could prove to be a double-edged sword when inflation kicks in as expected, more so if it then forces the Fed’s hand.”
And Katerina Simonetti at Morgan Stanley Private Wealth Management added: “We believe we’re still very much in a bull market, but certain pullbacks like the one we’ve seen since the beginning of this year are very natural and sometimes needed.
“If interest rates start moving higher and quicker than expected, then there’s a chance there might be more significant pullback in the market,” she told Bloomberg TV. With AFP