Mart down on slew of adverse events
The local market stayed in the red as lawmakers still need to pass into law an indemnification program before the country can gain access to vaccines
Shares fell once again after minutes from the US Federal Reserve’s January meeting showed officials were skeptical about the US economy improving enough to warrant removing monetary stimulus any time soon.
In addition, investors remained cautious as volcanic activity in Taal restricted the movement in certain towns in Batangas, Regina Capital Development Corp. managing director Luis Limlingan said.
The Philippine Stock Exchange index (PSEi) finished the day at 6,849.64, falling 116.79 points (pts) or 1.68 percent after moving from 6,849.64 to 6,972.26 involving 159,270 shares worth P8.37 billion.
AB Capital Securities Inc. noted the bellwether extended its losses as a result of vaccine rollout delays.
“The local market stayed in the red as lawmakers still need to pass into law an indemnification program before the country can gain access to vaccines,” AB Capital said in a note.
Key decliners were SM Prime Holdings, SM, JG Summit, Ayala Land Inc., and Ayala Corp. Net foreign selling breached the P1 billion mark.
Cold snap unsettles mart
Asian markets were mixed on profittaking and growing worries about inflation, which offset long-running optimism about the global recovery as vaccines are rolled out, infection rates slow and US President Joe Biden’s stimulus winds through Congress.
Oil prices pushed further up to 13-month highs as the severe cold snap in the United States hammers production, even trumping news that Saudi Arabia is planning to up output in light of the commodity’s strong performance in recent months.
Confidence that the world economy will enjoy a scorching rebound from last year’s collapse has fired global equities and other risk assets for months as immunization programs allow people to slowly get back to a semblance of normality as lockdowns are eased.
“Strong US economic data dampened the argument that the economy still needs massive stimulus and as rising inflation expectations start to weigh on valuations,” said OANDA strategist Edward Moya.
Bigger subsidies possible
The minutes of the Federal Open Market Committee saw improvement in the mediumterm economic outlook since the December meeting, largely due to the prospect of increased fiscal support.
Key decliners were SM Prime Holdings, SM, JG Summit, Ayala Land Inc., and Ayala Corp.
At the next meeting in March, FOMC participants will have to incorporate these new expectations of additional fiscal stimulus into the Summary of Economic Projections. Oil rose buoyed by frigid Texas temperatures that curtailed production in the largest US producing state, offset somewhat by reports that Saudi Arabia plans to increase output in the coming months. CL