Stocks advance; JG Summit up
The stock market extended a rally Friday, lifted by positive corporate earnings and central bank’s decision to keep current interest rates for the meantime.
The Philippine Stock Exchange Index gained 66.42 points, or 0.9 percent, to 7,345.02 on a value turnover of nearly P14 billion. Gainers beat losers, 103 to 78, with 58 issues unchanged.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. on Thursday said the current policy settings would likely remain unchanged, despite the latest move by the US Federal Reserve to increase interest rates in the US.
He said the US Fed move was “positive for risk sentiment in the near term, but on the whole the Fed’s balanced view could be good for global growth and trade particularly for trading partners of the US like the Philippines.”
JG Summit Holdings Inc. of industrialist John Gokongwei advanced 4.2 percent to P81.05, while property unit Robinsons Land Corp. climbed 3.7 percent to P23.85.
Bank of the Philippine Islands, the third-biggest lender in terms of assets, rose 3.5 percent to P102.40, while sister company Ayala Land Inc. added 1.8 percent to P36.55.
The rest of Asian markets struggled Friday as caution prevailed following the previous day’s rally, with investors concerned about a lack of detail on Donald Trump’s tax reforms and spending promises in his first budget.
The tepid increases came a day after the Federal Reserve’s rate hike and signal of a slower pace of future rises sparked a surge across equities and sent the dollar tumbling.
The greenback struggled to recover from that sell-off, with the pound and euro holding on to their gains, while a stronger yen further dented Japanese exporters, in turn dragging the Nikkei index down.
On Wall Street the Dow and S&P 500 both retreated on disappointment with Trump’s controversial budget proposal, which was filled with big defense spending and cuts to education and environmental projects.
However, it lacked any detail on his pledge to slash taxes and ramp up infrastructure spending, with analysts saying there is a fear that ongoing acrimony on his health policy could mean the growth-firing measures will not come as soon as hoped.
Tokyo ended the day 0.4 percent lower but Toshiba soared five percent on reports the Japanese government is mulling using state money to support the company’s plans to spin off its memory chip business.
Hong Kong was barely moved after a more than two percent jump Thursday, while Shanghai suffered heavy selling in the afternoon to end one percent lower.
Sydney added 0.2 percent and Seoul put on 0.7 percent while Singapore edged 0.2 percent higher.
Taipei was also higher, while Jakarta touched a record high in intra-day trade as emerging markets were boosted by the prospect US rates will not rise as quickly as expected. Higher US borrowing tend to hurt emerging markets as they lead investors to withdraw cash from the country to seek better returns.
“A less hawkish monetary policy in the US is more likely to push assets outside of the US into higher-risk, higher-return markets,” James Woods, a Sydney-based investment analyst at Rivkin Securities, told Bloomberg News. With AFP.