Stocks up slightly; PLDT, Globe advance

Stocks rose slightly Tuesday as many investors went into consolidation mode in search of new catalysts that could propel the market higher.

The Philippine Stock Exchange Index added 25.05 points, or 0.3 percent to 7,367.42 on a value turnover of P9.5 billion. Losers, however, beat gainers, 113 to 88, with 46 issues unchanged.

PLDT Inc., the biggest telecommunications firm, climbed 2.9 percent to P1,750, while rival Globe Telecom Inc. of the Ayala Group advanced 2.4 percent to P3,460.

Grocery chain AllDay Marts Inc. of the Villa Group gained 2.5 percent at P0.82, while International Container Terminal Services Inc., the largest port operator and owned by tycoon Enrique Razon Jr., increased 2.6 percent to P195.

The rest of Asian equities were mixed Tuesday with inflation still a point of concern, while traders were trying to gauge the success of a summit between Joe Biden and Xi Jinping as they looked to guide their way through a period of tension.

After a flat day on Wall Street, Asia fluctuated.

Hong Kong led gains with tech firms building on a recent advance as concerns about China’s recent crackdown on the sector ease, while the crisis at developer China Evergrande has also moved into the background.

Tokyo, Singapore, Taipei, Bangkok and Jakarta also rose but Shanghai, Seoul, Mumbai and Wellington slipped back.

Global markets have enjoyed about 18 months of healthy gains—with many hitting record or multi-year highs—thanks to ultra-loose central bank monetary policies put in place at the start of the pandemic.

But with the recovery well on track and people returning to a semblance of normality, inflation is surging to levels not seen in decades owing to a spike in demand and supply chain snarls—forcing policymakers to turn off the taps.

Now there is a growing concern that officials—particularly at the Federal Reserve—will have to withdraw their massive support measures faster than hoped, while some observers have warned they could be leaving it too late, and risking prices running out of control.

Among them are former New York Fed president Bill Dudley, who told Bloomberg TV the central bank was “going to have to get the taper done quicker,” though he added that moving too fast could spook investors and cause a “taper tantrum.”

And ex-Richmond Fed boss Jeffrey Lacker warned: “They’re on track to a major policy blunder.”

“They need to pivot, recalibrate pretty rapidly. They need to accelerate the taper, get rate increases started earlier next year, in the first half, and they’re going to need some good luck.”

The concern was also being felt across the Atlantic, where Bank of England chief Andrew Bailey said he was “very uneasy about the inflation situation.”

Still, for now, investors remain optimistic that officials are on the right track, with Wall Street’s three main indexes as well as markets in Europe sitting at or just below all-time highs.

“We do still see quite an accommodative fiscal and monetary policy continuing throughout 2022,” Sarah Shaw, of asset manager 4D Infrastructure, said.

“Of course, should inflation prove to be more permanent or higher than expected, then central bank action is inevitable.” With AFP