Philippine stocks fall as vaccine, economic recovery hopes ebb

Shashwat Awasthi, Reuters

Posted at Dec 04 2020 02:14 PM

The Philippine Stock Exchange (PSE) building at the Bonifacio Global City, Taguig. February 18, 2020. Jonathan Cellona, ABS-CBN News

MANILA - Philippine shares snapped a three-day winning run on Friday, hit by a forecast of a deeper economic contraction in the country this year and news that U.S. drugmaker Pfizer Inc had halved its COVID-19 vaccine production target for 2020.
 
Trading across other emerging Asian stock markets remained mixed as sentiment around downbeat vaccine headlines was partly offset by hopes that a U.S. coronavirus aid plan would be pushed through Congress. 
 
Stocks in Indonesia and Malaysia fell 0.4 percent, while South Korea's KOSPI climbed 1.6 percent to a record as shares of chipmakers continued to strengthen.
 
Manila shares dropped 0.7 percent and the peso eased after officials on Thursday forecast a 8.5 percent - 9.5 percent contraction in the economy, compared with a previous forecast of a 5.5 percent decline. 
 
The Philippine economy, one of Asia's fastest-growing before the pandemic, is still expected to rebound strongly over the next two years and recent upbeat manufacturing and jobs data has supported the recovery view.
 
Raul Ruiz, head of research at RCBC Securities, said vaccine headlines were heavily affecting sentiment as investors had turned their attention to the speed and magnitude of recovery in 2021.
 
"In this regard, news that the distribution of Pfizer's vaccine would be constrained by supply chain issues probably has more bearing on the market," Ruiz said, also attributing the fall to profit-taking after a 15 percent rally in stocks since October.
 
Indian shares advanced, largely unaffected after the Reserve Bank of India, as widely expected, left its repo rate unchanged at the end of a three-day policy meeting on Friday.
 
"The evolving growth-inflation mix suggest that the (Indian) central bank monetary policy committee would prefer to settle into a long pause, with a bias to anchor rates through strong dovish guidance," strategists at Singapore bank DBS said.
 
Among currencies, the Taiwanese dollar and the South Korean won each jumped more than 1 percent, while others failed to make significant headway despite the U.S.
dollar's woes. 

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