Market retreats; Synergy Grid surges

The stock market fell Monday on profit taking as investors stayed on the sidelines amid the political jockeying among next year’s presidential bets.

The Philippine Stock Exchange Index slipped 40.47 points, or 0.6 percent, to 7,342.37 on a value turnover of nearly P8 billion. Losers beat gainers, 124 to 71, with 42 issues unchanged.

DITO CME Holdings Corp., the third mobile player, dropped 4.6 percent to P6.04, while Semirara Mining and Power Corp., the largest coal miner, declined 4.5 percent to P21.10.

Synergy Grid & Development Phils. Inc., operator of the country’s electricity grid, however, surged 9.9 percent to P15.94, while noodles maker Monde Nissin Corp. rose 2.5 percent to P17.38.

The rest of Asian equity markets mostly rose Monday to build on a recent run-up following another healthy showing on Wall Street, though inflation concerns continue to dampen the mood.

While optimism about the global economic recovery remains intact, the rise in prices at rates not seen for decades has traders increasingly worried that central banks will have to tighten monetary policy quicker and more sharply than previously thought.

And data out of the United States last week showing consumer sentiment at a 10-year low indicated that the issue is being felt more in people’s pockets, putting pressure on the Federal Reserve to step in.

However, for now officials are sticking to their view that the inflation spike will be temporary and peter out as supply chain problems are resolved.

National Australia Bank’s Ray Attrill warned US President Joe Biden—who is seeing his popularity take a hit because of the issue—could suffer.

“If consumer confidence, and (real) spending is seen to be suffering under the weight of six percent consumer price inflation, then it suddenly becomes a political problem for the White House, not just a headache for the Fed,” he said in a note.

Still, Wall Street’s three main indexes ended last week on a strong note, paring steep losses suffered on Tuesday and Wednesday in reaction to forecast-beating US inflation.

Tokyo enjoyed a strong showing after data showing the economy contracted more than forecast in the third quarter raised hopes the government will unveil a huge stimulus program to stoke a recovery.

Hong Kong, Sydney, Seoul, Wellington, Singapore, Mumbai, Bangkok and Taipei were also higher but Shanghai and Jakarta edged down.

There was little initial reaction to data showing Chinese retail sales grew far more than expected in October, with traders concerned about a slowdown in economic growth owing to lockdowns put in place to battle fresh virus outbreaks.

The weakness is giving the country’s central bank a headache as it must try to nurture a recovery while at the same time keeping a lid on inflation, which is sitting at levels not seen since the mid-1990s.

Meanwhile, traders will be keeping tabs on a virtual meeting between Biden and his Chinese counterpart Xi Jinping that is planned for Monday evening US time.

The virtual meeting of the presidents comes against a backdrop of rising tensions over several issues including Taiwan, trade, human rights and Hong Kong. With AFP