Stock market climbs again; Converge, Monde Nissin up

Stocks sustained their gains Wednesday on declining daily COVID-19 cases in the country and easing lockdown restrictions that are boosting consumer confidence.

The Philippine Stock Exchange Index rose 30.77 points, or 0.4 percent, to 7,297.08 on a value turnover of P9.4 billion. Gainers beat losers, 106 to 80, with 52 issues unchanged.

Fiber broadband services provider Converge ICT Solutions Inc. advanced 6 percent to P32.85, while noodles maker Monde Nissin Corp. rallied 2.5 percent to P15.52.

DMCI Holdings Inc. of the Consunji Group, however, fell 3.6 percent P8.77, while unit Semirara Mining and Power Corp., the biggest coal miner, declined 6.3 percent to P27.40

Most Asian markets rose again on Wednesday, joining a global rally fueled by strong earnings, while investors kept tabs on comments from the Federal Reserve as it prepares to bring an end to its vast financial support program.

Signs of progress on US President Joe Biden’s massive spending bill provided an extra lift to sentiment, while bitcoin came within touching distance of a new record after a new financial instrument to invest in the cryptocurrency started trading in New York.

Strong profit reports from big-name firms over the past week have reinforced optimism that the corporate sector is, for now, weathering a recent slowdown in economic growth, supply chain issues and surging inflation, providing a much-needed boost to worried traders.

Johnson & Johnson, United Airlines and Netflix were the latest positives from the reporting season, adding to top Wall Street banks including JPMorgan Chase, Bank of America and Morgan Stanley last week.

Tokyo, Hong Kong, Sydney, Wellington and Bangkok all rose, though there were slight losses in Shanghai, Singapore, Taipei and Seoul.

Rising prices and the end of central bank largesse continued to cast a shadow.

Concerns about surging inflation running out of control have forced several central banks to hike interest rates already—with others to soon follow—and the prospect of an end to the era of cheap cash has caused an 18-month equity rally to stutter.

While some countries have already started the tightening cycle, all eyes are on the Fed owing to its oversized role in the global economy.

With the United States well on the recovery track, officials have signaled they will start to taper their colossal bond-buying scheme before the end of the year.

But the big questions are now over when the Fed will begin tapering and when it will hike interest rates—with some observers seeing a possible lift in borrowing costs in mid-2022.

On Tuesday, board member Christopher Waller said the bank should wind down from next month, and while he thought a rate hike was “still some time off” as inflation moderates, he added that the near term would be “critical.” If price rises did not moderate by January the Fed “could bring forward rate hikes.”

Another board member Michelle Bowman was also in favor of a November start and said any benefits of continuing the asset purchases were likely offset by the potential costs. With AFP