The stock market slumped Tuesday in knee-jerk reaction to the move of Fitch Ratings to revise its credit rating outlook on the Philippines to negative from stable after keeping the investment grade score of “BBB.”
The Philippine Stock Exchange Index sank 118.74 points, or 1.7 percent, to 6,795.13 on a value turnover of P5.8 billion. Losers overwhelmed gainers, 125 to 66, with 51 issues unchanged.
Major property developer Ayala Land Inc. fell 3.5 percent to P35.65, while Universal Robina Corp. of the Gokongwei Group, the biggest snack food maker, dropped 3.2 percent to P138.50.
LT Group Inc. of the airline and tobacco tycoon Lucio Tan declined 6.2 percent to P11.44, while SM Investments Corp. of the Sy Group shed 2.8 percent to P990.
Meanwhile, the rally in global stocks extended into the rest of Asia on Tuesday as optimism about the upcoming earnings season outweighs worries over the fast-spreading Delta virus variant that is forcing leaders to reimpose containment measures.
Hope that central banks will maintain their ultra-loose monetary policies, or taper them very gradually, is also providing support to traders as economies recover from the ravages of last year’s pandemic-induced collapse.
The release of key data and other events will also be closely tracked this week as markets try to get an idea about the state of the global rebound, with Chinese growth, US inflation and several central bank decisions in view.
Wall Street’s three main indexes chalked up more records as investors prepared for the earnings deluge with the release of top banks including JP Morgan and Goldman Sachs later in the day.
Observers are predicting the period could be the best in more than two decades, though they warn that the readings would have to be blockbuster to build on the latest markets rally, with many traders “buying the rumor and selling the news”.
Hong Kong led the gains in Asia, rising 1.7 percent, while Tokyo, Shanghai, Seoul, Singapore, Mumbai, Wellington, Bangkok and Taipei also enjoyed gains.
However, Sydney gave up early advances to end flat, while Jakarta slipped.
COVID-19 continues to cast a dark shadow as new case numbers rise around the world, with the United States and Britain—which are well advanced in their vaccination programs—also seeing high numbers, though with lower deaths and hospitalizations.
Some governments are also now considering approving third jabs for those who have had their full dosage.
The sharp rise in infections has forced some governments, including in France and Greece, to impose restrictions again to quell the spread, leading to worries about the impact on the economic recovery.
That concern has also weighed on oil prices, which suffered their first fall Monday after a two-day gain.
They were rising again on Tuesday, helped by the International Energy Agency saying demand surged last month. However, it also warned that with OPEC and other producers pumping less than needed, the market would likely be volatile until they reached a deal to hike output. With AFP