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Thursday, March 28, 2024

Market extends gains; RCBC up

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Stocks rose for a third day, as they tracked regional markets after moderate candidate Emmanuel Macron won the first round of France’s presidential election and looked set to triumph in the run-off against far-right candidate Marine Le Pen next month.

The Philippine Stock Exchange index, the 30-company benchmark, rose 10 points, or 0.1 percent, to close at 7,588.88 Monday.  This brought total gains this year to 10.9 percent.

The heavier index, representing all shares, also picked up 10 points, or 0.2 percent, to settle at 4,542.81, on a value turnover of P5.2 billion. Losers outnumbered gainers, 109 to 84, while 52 issues were unchanged.

Thirteen of the 20 most active stocks ended in the green, led by MRC Allied Inc. which surged 14.5 percent to P0.435 and Rizal Commercial Banking Corp. which jumped 10.4 percent to P53.  Appliance manufacturer Concepcion Industrial Corp. added 5.7 percent to close at P74.

Meanwhile, investors globally had been fearful that a wave of populism, which swept Donald Trump to the White House and saw Britain leave the EU, could lead to a win for the anti-European Le Pen and put the future of the bloc in doubt.

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However, Macron is widely expected to gallop to victory over the divisive Front National leader and traders gave a huge thumbs-up, sending the euro flying above $1.09 at one point before paring the gains to $1.0850 from $1.0726 in New York on Friday.

The single currency also jumped to 119.46 yen from 117.07 yen.

In early European trade Paris surged 4.1 percent, London jumped 1.4 percent and Frankfurt gained 0.2 percent.

“Markets are happy to buy what they see as the fact—that 39-year-old Emmanuel Macron will be confirmed as the next president of the French republic in two weeks’ time,” Ray Attrill, head of FX strategy at National Australia Bank, said in a commentary.

The surge in optimism drove down the yen—considered a safe bet in times of uncertainty—which in turn lifted Japanese exporters.

Tokyo’s Nikkei ended up 1.3 percent, Sydney added 0.3 percent, Seoul gained 0.4 percent and Wellington put on 0.4 percent.

Hong Kong closed 0.4 percent higher but Shanghai sank 1.4 percent, extending a recent sell-off fuelled by profit-taking, liquidity concerns and regulatory plans.

“Market sentiment has been damped by recent tightening supervision on all fronts such as the banking commission, insurance commission, securities regulator,” Ben Kwong, executive director of KGI Asia in Hong Kong, told Bloomberg News. 

“They expressed concern about bubbles and credit defaults. The deleveraging process is still in progress.”

Greg McKenna, chief market strategist at AxiTrader, said in a note that markets generally are “celebrating as though Macron is already the president of the republic”. 

The gains in Asia extended Friday’s rally that was built on comments from US Treasury Secretary Steven Mnuchin, who promised that a tax reform plan would be unveiled soon.

That was followed by Trump saying Friday that there would be “a big announcement on Wednesday having to do with tax reform”.

Eyes are now on Washington, where lawmakers have just four days to agree a funding bill to avoid a painful government shutdown that would cost the economy billions of dollars. With AFP, Bloomberg

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