Stocks surged Wednesday as COVID-19 cases started to decelerate, spurring hopes that some of the harsh quarantine rules in Metro Manila and nearby provinces will be eased shortly.
The Philippine Stock Exchange Index soared 112.67 points, or 1.8 percent, to 6,469.14 on a value turnover of P5.3 billion. Gainers beat losers, 111 to 70, with 65 issues unchanged.
Philippine National Bank, the fifth biggest lender in terms of assets, advanced 10.5 percent to P30 after its board approved the declaration of shares of PNB Holdings Corp. as property dividends effective May 18, 2021.
DITO CME Holdings Corp., the third-biggest mobile phone company, rose 4.8 percent to P10.44, while JG Summit Holdings Inc. of the Gokongwei Group climbed 3.5 percent to P53.10. Aboitiz Euity Ventures Inc. of the Aboitiz Group bounced back 4 percent to P35.35.
The rest of Asian markets mostly rose Wednesday as investors awaited the end of the Federal Reserve’s latest policy meeting and Joe Biden’s first speech to Congress later in the day.
There was no inspiration from Wall Street, which provided a tepid lead despite another day of forecast-beating earnings, which analysts said indicated the latest rally may have run out of steam.
While in some countries vaccines are rolling out, lockdowns are easing and economies are recovering, there is a growing concern that frightening spikes in others—particularly India and Brazil—could deal a blow to the global rebound.
Adding to the mix is the long-running worry about inflation, with many observers warning that the expected surge in economic activity and demand will put massive upward pressure on prices that will force central banks to hike interest rates from their current ultra-low levels.
With that in mind the Fed’s meeting this week will be pored over for an idea about its plans for monetary policy as the recovery in the world’s top economy gathers pace.
Asian equity markets mostly climbed, with Tokyo, Hong Kong, Shanghai, Sydney, Wellington, Mumbai, Bangkok and Jakarta all seeing healthy gains, though Seoul and Taipei slipped. Singapore was flat.
Fed boss Jerome Powell is expected to repeat his mantra that borrowing costs will be kept at record lows until unemployment has been tamed and inflation is consistently running hot. Still, many feel the bank might not be able to stick to that if prices continue to surge.
“The economic outlook now is starkly different from when the Federal Reserve last met in March,” said CMC Markets analyst Michael Hewson. “With their primary concern being to try and temper market optimism about a strong economic rebound, against rising expectations that the US central bank might start to look at tapering its bond purchase program, or start to raise rates well before 2024, in the face of concerns about sharply rising inflationary pressures.”
And Komal Sri-Kumar, of Sri-Kumar Global Strategies Inc., told Bloomberg TV that while the Fed was “oriented toward the market,” he warned that traders were now hooked on the low rates and were now dependent on the bank’s largesse.
“If the Fed chairman changes tack you’re going to have a massive market correction,” he added. With AFP
