Stocks fall on profit taking; Jollibee, Megaworld down

posted July 28, 2021 at 07:50 pm
by  Manila Standard Business
The stock market retreated Wednesday on mild profit-taking as investors turned cautious amid the possible return of stricter lockdown rules in Metro Manila and nearby provinces.

The Philippine Stock Exchange Index shed 49.55 points, or 0.8 percent, to 6,473.03 on a value turnover of P4.5 billion. Losers overwhelmed gainers 144 to 44, with 37 issues unchanged.

BDO Unibank Inc., the biggest lender in terms of assets, fell 2.1 percent to P104.20, while Megaworld Corp., the largest lessor of office spaces, dropped 3.7 percent to P2.89.

Jollibee Foods Corp., the biggest fast-food chain, declined 2.7 percent to P190.50, while JG Summit Holdings Inc. of the Gokongwei Group slipped 2.5 percent to P57.50.

Meanwhile, Asian markets mostly fell again Wednesday as fears over China’s regulatory crackdown continued to reverberate around trading floors, while analysts said companies might struggle to maintain their recent run of blockbuster earnings results that have sent valuations soaring.

Hong Kong and Shanghai were in focus after suffering a diabolical previous three days in the wake of Beijing unveiling a series of measures aimed at curbing a range of industries—including tech and private tuition—that have raised fears of further action.

Hong Kong rose more than one percent having oscillated wildly but it made only a small dent in the more than nine percent drop suffered over the previous three days.

Tuition firms enjoyed some respite but tech giant Tencent continued to suffer selling pressure, with further pressure on the firm after China ordered developers to address problems linked to pop ups in their apps.

Shanghai fell again, while there were also losses in Tokyo, Sydney, Singapore, Taipei, Mumbai, and Jakarta. Seoul and Wellington inched higher.

The struggles in Asia were reflected in New York, where the Nasdaq led losses. And while some of the selling was down to profit-taking after all three indexes hit records on consecutive days, analysts said unease about China’s moves played a role.

“The turmoil in tech stocks in China is finally bleeding into US tech stocks,” said Chris Murphy, of Susquehanna International Group, adding that he was “concerned investors will lighten up in general” after major tech earnings heading into “a seasonably weak period for equities.”

Murphy’s comments came as Apple, Google-parent Alphabet, and Microsoft all announced better-than-expected results, but their after-hours share prices dropped.

“The key takeaway from this wrath of earnings was that risk appetite will likely struggle going forward given the persistent struggles with supply chains, concerns over growth in China, and uncertainty over how much more monetary and fiscal support this economy will see,” said OANDA’s Edward Moya. 

“Wall Street has priced in lower interest rates for longer and now we need to see if the current delta variant concerns will make the Fed push back any hint of taper announcement until the end of the year.”

Eyes will be on the Federal Reserve’s latest policy meeting, which ends later Wednesday, and will be closely watched for any guidance on its plans in light of the economic recovery, reopening, and spread of the Delta variant that has sent infections spiking.

Topics: stock market , Philippine Stock Exchange Index , BDO Unibank Inc.
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