The stock market retreated Friday along with the rest of Asia, as the region met Joe Biden’s $1.90-trillion stimulus proposal with a shrug.
The Philippine Stock Exchange Index fell 34.69 points, or 0.5 percent, to 7,238.46 on a value turnover of P11 billion. Gainers, however, beat losers, 120 to 103, with 42 issues unchanged.
AC Energy Corp. dropped 2.6 percent to P6.48, while SM Investments Corp. of the Sy Group declined 2.4 percent to P1,051.
Basic Energy Corp., however, surged 36.2 percent to P1.43, while magnetite iron miner Apollo Global Capital Inc. advanced 7.1 percent to P0.30.
The rest of Asian stocks fell as observers said Biden’s massive spending spree had been largely factored into valuations, while profit-taking weighed on markets at the end of a broadly healthy week.
Reassurances from Federal Reserve boss Jerome Powell that record-low interest rates and loose monetary policy would remain in place for some time removed some lingering angst on trading floors, while there remains plenty of optimism about the long-term economic outlook.
Surging virus infections and deaths—and the lockdowns they are forcing governments to impose—are the main stumbling blocks for investors, despite the rollout of vaccines that could allow life to return to normal.
With days before he takes office, President-elect Biden unveiled his rescue package, which he said addressed “the twin crises of a pandemic and this sinking economy.”
While welcomed by investors, the proposals failed to fire a surge in stocks, with Asian markets mostly down with analysts warning that some valuations maybe a little overdone and ripe for investors to cash in their profits.
Tokyo, Seoul, Mumbai, Taipei, Jakarta, Bangkok and Wellington were all down, though Hong Kong and Singapore saw gains while Sydney and Shanghai were barely moved.
The plans include an extra $1,400 cash handout for individuals—to top up the $600 in last month’s stimulus—a hike in the minimum wage to $15 an hour and billions of dollars to ramp up vaccinations so that 100 million are administered in 100 days.
There is also money for struggling state and local governments, the safe reopening of schools and an extension of unemployment benefits.
The need for more economic help was highlighted by data showing new applications for unemployment benefits rose by 181,000 last week, the biggest rise since the pandemic began in March.
But analysts warned that while Democrats have control of Congress, the spending plans were far from guaranteed to get through untouched.
“Given the distaste Republicans have for state aid, Mr Biden’s bipartisan hopes will be immediately tested,” said OANDA’s Jeffrey Halley. “We have no visibility from the Republican Senators about how bipartisan they will feel, if at all. The US Senate minority may yet filibuster the hopes of President Biden.”
There is a worry that the bill could be jammed up in the Senate as lawmakers debate the impeachment of Donald Trump, which some observers say could also slow down confirmation hearings for Biden’s cabinet picks. With AFP