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Market drops; Converge, AC Energy lead decliners

Stocks fell for the second straight day Wednesday as investors continued to take profits from recent gains, while concerns over a global energy crunch also jangled nerves.

The Philippine Stock Exchange Index slipped 38.90 points, or 0.6 percent, to 7,068.92 on a value turnover of P11.9 billion. Losers beat gainers, 111 to 89, with 48 issues unchanged.

Fiber broadband services provider Converge ICT Solutions Inc. sank 8.2 percent to P32.10, while AC Energy Corp., a unit of the Ayala Group, dropped 6.2 percent to P12.12.

Noodles maker Monde Nissin Corp. declined 4 percent to P17, but Semirara Mining and Power Corp., the biggest coal miner, rose 8.9 percent to P30.50.

The rest of Asian markets were mixed Wednesday as investors awaited key US inflation data that could play a major role in the Federal Reserve’s plans to tighten monetary policy, while concerns over a global energy crunch also jangled nerves.

With the world’s top economy well on the recovery track, the US central bank has already signaled it will begin to wind back the massive financial support put in place at the start of the pandemic.

But supply chain bottlenecks, surging demand fueled by reopenings and spiking fuel costs have sent inflation soaring in recent months, putting pressure on bank chiefs to act to prevent prices from running out of control.

An extended period of higher-than-targeted inflation is ramping up expectations that the Fed will have to lift interest rates after it has finished tapering its massive bond-buying program.

And some analysts are now suggesting the first hike could come as soon as mid-2022, well before the early 2023 originally predicted.

The prospect of higher borrowing costs has put the brakes on a rally across global markets that has run for about a year and a half.

The upcoming earnings season is also being nervously watched for an idea about the impact on company profits from trade bottlenecks and rising inflation, with forecasts for the fourth quarter of particular interest.

“There’s real damage that’s potentially lurking from the supply chain issues,” said John Kilduff of Again Capital. “It’s a real potential negative for the global economy.”

Wall Street’s three main indexes provided a tepid lead, and Asia struggled for direction.

Tokyo, Sydney and Taipei edged down, though there were gains in Seoul, Singapore, Mumbai, Jakarta and Wellington.  Hong Kong was closed because of a typhoon in the city.

Shanghai rose after better-than-forecast export data and ahead of Thursday’s release of China’s inflation readings, with prices in the world’s number two economy also sharply higher.

Oil prices edged down having rallied to multi-year peaks on surging demand, with analysts suggesting that talks between world powers and Iran on the country’s nuclear program provided some respite.

A deal could allow Tehran to start exporting crude globally again, easing some pressure on supplies ahead of the approaching northern hemisphere winter.

Limited stockpiles and the reopening of economies have sent prices of oil and other fuels soaring, raising concerns about the impact on the global economic recovery. With AFP

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