Stocks rally; URC, BDO, Ayala Land lead gainers

Stocks bounced bank Monday on bargain hunting after a steep loss Friday, but investor optimism over the global recovery was kept in check by worries over the spread of the Delta coronavirus variant as well as China’s regulatory crackdown.

The Philippine Stock Exchange Index jumped 176.08 points, or 2.8 percent, to 6,446.31 on a value turnover of P3.5 billion. Losers, however, beat gainers, 119 to 78, with 46 issues unchanged.

BDO Unibank Inc. of the Sy Group, the biggest lender in terms of assets, rose 4.4 percent to P106.50, while parent SM Investments Corp. climbed 3.8 percent to P945.

Universal Robina Corp. of the Gokongwei Group, the largest snack food maker, advanced 6.6 percent to P135, while major property developer Ayala Land Inc. of the Ayala Group gained 4 percent at P34.

Most markets rose in Asia.

Signs that US lawmakers were edging towards agreement on President Joe Biden’s $1-trillion infrastructure bill were unable to provide much of a boost, while eyes were on the release of US jobs data at the end of the week as firms struggle to fill positions despite high unemployment.

In the latest sign of an upbeat global outlook, figures last week showed the US economy had returned to its pre-pandemic level—though at a slower pace than expected—while the eurozone expanded at a much better rate than forecast.

However, observers said the rally that world markets have enjoyed for much of the past year was sputtering as investors grow increasingly concerned about spiking inflation that many have warned could force central banks to taper their ultra-loose monetary policies.

Added to that are the slow COVID-19 vaccination programs in some countries and the rapid spread of the Delta variant that has led to the reimposition of lockdowns and other containment measures.

Among those suffering a spike in cases is China, which managed to bring the disease largely under control but some cities are being forced to introduce new control measures.

Tokyo, Hong Kong, Shanghai, Sydney, Seoul, Wellington, Taipei, Mumbai and Jakarta rose but Singapore and Bangkok fell.

“Shares remain at risk of a short-term correction or volatility as coronavirus cases rise globally, the inflation scare continues and as we come into seasonally weaker months,” said Shane Oliver at AMP Capital.

“But surging company profits in the US and lower bond yields are providing support.”

Nervous traders are keeping tabs on China after authorities last week embarked on a crackdown on the country’s private tuition firms as well as the tech and property sectors.

The moves raised concern that other industries could be next, despite officials and state media trying to calm markets in the face of a rout.

On Friday, tech firms were told by authorities to conduct “deep self-examination” over issues including data security and user rights as they tighten the leash on big corporations citing national security and antitrust concerns.

Major names including Alibaba, Tencent, ByteDance, and Pinduoduo were among more than 20 firms summoned to the meeting with a department of the Ministry of Industry and Information Technology.

Tencent fell 0.8 percent in Hong Kong, though Alibaba rose more than one percent. With AFP