Stock market retreats; Basic, MerryMart gain

The stock market fell Friday on mild profit taking, with many investors staying on the sidelines in the absence of a catalyst that could push the benchmark index back to 6,500 points.

The Philippine Stock Exchange Index slipped 45.15 points, or 0.7 percent, to 6,494.81 on a value turnover of P5.7 billion. Losers edged gainers, 108 to 104, with 44 issues unchanged.

JG Summit Holdings Inc. of the Gokongwei Group dropped 3.7 percent to P58.40, while miner Apollo Global Capital Inc. shed 4.7 percent to P0.224.

MerryMart Consumer Corp., a supermarket chain owned by businessman Edgar Sia, however, advanced 8.1 percent to P5.58, while Basic Energy Corp. rose 5 percent to P1.06.

The rest of Asian markets rose Friday as record Chinese economic growth reaffirmed the country’s strong recovery, while traders tracked a Wall Street surge fueled by blockbuster reports on US consumer spending and jobless claims.

Officials in Beijing said the world’s second-biggest economy expanded 18.3 percent in the first quarter, boosted by a sharper-than-expected increase in retail sales that gave hope the country’s vast army of consumers are again dipping into their pockets.

The economic growth figure was the highest since records began three decades ago, enhanced by its chronically weak comparison figure from last year, though the reading was slightly below forecasts in an AFP survey.

Analysts also pointed out that the quarter-on-quarter growth was below estimates.

“China’s growth will trend lower going forward,” said OANDA’s Edward Moya, though he did say it “will likely prevent policymakers from tightening too quickly.”

Asian markets struggled in early trade but picked up the pace as the day moved on. Shanghai led gains with Hong Kong, while Tokyo, Sydney, Seoul, Mumbai, Singapore, Taipei, Bangkok and Wellington were also well up. Jakarta edged down.

The tepid performance at the end of the week came despite a strong lead from Wall Street, where the Dow ended above 34,000 for the first time and the S&P 500 clocked yet another record.

The rally in New York came on the back of figures showing US jobless claims came in at their lowest level since the pandemic began, while retail sales soared 9.8 percent on-month in March as Americans began spending their $1,400 stimulus handouts, helped by the roll-out of vaccines. 

Traders were also buoyed by the fact that Treasury bond yields—a gauge of future interest rates—fell, soothing worries that the expected strong bounce in economic activity would send inflation rocketing and force the Federal Reserve to raise its record-low borrowing costs.

“US consumers wasted little time stuffing stimulus checks into starving retailer cash registers with stocks surging to cash register rings across the United States as consumers are made willing and able to spend, thanks to the US’s speedy vaccine rollout,” said Axi strategist Stephen Innes.

“With the Fed keeping the sugar taps open and offering up free tickets for investors to come frolic in the markets like ‘kids in the candy store’, the transition from policy to growth has been as smooth as silk with a benign reaction in yields suggesting that a growth tantrum is not on the cards anytime soon.” With AFP