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Stock market down slightly; PNB and DITO lead decliners

Stocks fell slightly Tuesday as investors wait for catalysts that could nudge the market out its range-bound zone.

The Philippine Stock Exchange Index slipped 10.13 points, or 0.2 percent, to 6,359.15 on a value turnover of P4.6 billion. Losers overwhelmed gainers, 149 to 57, with 43 issues unchanged.

Philippine National Bank, the sixth-biggest lender in terms of assets, dropped 5.3 percent on profit-taking, while DITO CME Holdings Corp., the major mobile phone company, declined 3.4 percent to P9.63.

Nickel Asia Corp., the largest nickel producer, shed 2.5 percent to P5.52, while major property developer Ayala Land Inc. slipped 1.4 percent to P31.85.

The rest of the equity markets in Asian trade were mixed Tuesday as investors bide their time ahead of the release of key US jobs figures later in the week.

Hong Kong rose a day after data showed the financial hub had finally escaped recession following seven quarters of contraction caused by the pandemic and the 2019 democracy protests.

Sydney, Seoul, Wellington and Jakarta also rose but Singapore, Taipei and Mumbai were in negative territory.

While the Dow and the S&P 500 on Wall Street provided a positive lead, there were few catalysts to drive business, with Tokyo and mainland China’s bourses closed for holidays.

Still, a top US Federal Reserve official provided some welcome comments as he reiterated the bank’s intention to maintain its ultra-loose monetary policy for the foreseeable future even as he predicted the world’s top economy would grow at its quickest pace since the 1980s.

In trying to soothe long-running fears that the expected burst of economic activity this year will fan inflation and force rate hikes, John Williams, president of the Fed’s influential New York branch, said: “It’s important not to overreact to this volatility in prices.”

He added that a sharp rise in inflation was to be expected owing to the low base of comparison last year as the virus shut down the global economy, but that would soon ease.

The latest snapshot of the economy comes Friday with the release of April jobs data, with some observers suggesting around one million positions created.

Analysts said that with highly accommodative policies put in place by the Fed and other central banks to ride out the pandemic likely in place for some time, markets still had some way to go up.

“The world remains almost perfect for equities,” said Chris Iggo at AXA Investment Managers, said.

Despite strong growth, rising earnings and rich valuations, “no one  is taking the punch bowl away for now”.

Still, with equities sitting around record or multi-year highs after a more than year-long rally, there is a feeling that they are in store for a small correction soon, before resuming their upward march.

Oil prices edged up, extending Monday’s rally with traders hopeful for a resumption of travel in Europe as leaders look at easing restrictions on foreign tourists as early as next month, if they are fully vaccinated or come from a country with COVID-19 under control. With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi , Philippine National Bank , PNB , DITO CME Holdings Corp.
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