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Market ends flat; AC Energy, Converge gain

The stock market closed virtually flat Monday in lackluster trading, with many investors opting to stay on the sidelines ahead of the April inflation rate.

The Philippine Stock Exchange Index slipped 1.59 points, or 0.03 percent, to 6,369.28 on a value turnover of P4.4 billion. Losers beat gainers, 111 to 83, with 56 issues unchanged.

Philippine National bank, the sixth-biggest lender in terms of assets, retreated 3.7 percent to P30, while Atlas Consolidated Mining & Development Corp. fell 7.4 percent to P8.04.

AC Energy Corp., a unit of Ayala Corp., however, rose 2.8 percent to P6.99, while  Converge ICT Solutions Inc., a fiber internet service provider owned by businessman Dennis Anthony Uy, climbed 2.4 percent to P19.10.

Meanwhile,  Asian markets mostly fell Monday following a soft lead from Wall Street, hit by profit-taking and lingering inflation worries.

With bourses closed in Japan and China for holidays most of the week, traders were easing back from their recent buying frenzy while there are also concerns that the more than year-long rally may have gone a little too far.

Hong Kong and Singapore were down more than one percent, while Taipei shed two percent. There were also losses in Seoul, Mumbai, and Jakarta though Wellington was up. Sydney was flat.

The losses came despite data showing a better-than-forecast jump in factory activity in Australia, Indonesia, Malaysia and Taiwan.

Investment giant Warren Buffett instilled some unease after saying at the weekend that he expected the US economy was in “super high gear” thanks to massive Federal Reserve and government support but that it would fan inflation.

He said “people have money in their pocket and they’re paying higher prices” and there was more inflation than expected six months ago.

His comments revived concerns that the explosive recovery, vaccinations and easing of lockdowns would push up prices to the extent that the Fed would have to ease up on its market-supportive, ultra-loose monetary policies.

Those worries continue to hover over trading floors despite Fed boss Jerome Powell’s repeated insistence that they will not tighten policy until they are happy that unemployment has been tamed and inflation is running consistently hot for some time.

However, Dallas Fed president Robert Kaplan broke ranks with Powell on Friday as he said tapering could soon be considered.

“We’re now at a point where I’m observing excesses and imbalances in financial markets,” he said.

“I’m very attentive to that, and that’s why I do think at the earliest opportunity I think will be appropriate for us to start talking about adjusting those purchases.”

National Australia Bank’s Ray Attrill said in a note: “The main overarching rationale remains on the pace of the recovery which he sees as being much faster than he previously expected and now forecasts unemployment at 4 percent by year’s end.

“If that scenario plays out, it is also conceivable rate rises may start earlier, with Kaplan stating the Fed may need to raise rates next year.”  

Traders will be keenly watching the release of US jobs data this week, which will provide the latest snapshot of the world’s top economy and its recovery. With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi , global stock market , AC Energy Corp. , Converge ICT Solutions Inc.
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