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Thursday, March 28, 2024

Stock market rallies to year’s high

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The stock market rallied Tuesday on stronger economic growth prospects in the first quarter of 2017, with investors now looking forward to Donald Trump’s promised tax reforms.

The Philippine Stock Exchange Index jumped 111.58 points, or 1.5 percent, to a year-high of 7,700.46 on a value turnover of P8.31 billion. Gainers beat losers, 113 to 73, with 57 issues unchanged.

Local economists have become bullish on the country’s first-quarter growth. Economists from First Metro Investment Corp. and University of Asia and the Pacific said in a joint report Tuesday the economy likely expanded to as high as 7 percent in the first quarter from 6.8 percent a year ago driven mainly by the sustained domestic demand and improving global and US economy

“With the global economy, led by the US, showing signs of greater vitality, this should spill over into the Philippine economy… ,” the April issue of the Market Call capital markets research said.

“… And given solid domestic demand, we expect GDP growth in the first quarter should range between 6.5 percent and 7 percent, with a possible upside surprise,” the economists said.

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DMCI Holdings Inc. of the Consunji Group advanced 3.2 percent to P13, while GT Capital Holdings Inc. of tycoon George Ty climbed 2.7 percent to P1,262.

PLDT Inc., the biggest telecommunications company, gained 2.6 percent to P1,765, while SM Investments Corp. of retail tycoon Henry Sy Sr. rose 2.5 percent to P727.

The rest of Asian markets extended gains Tuesday while the euro held up following Emmanuel Macron’s first-round presidential election victory in France.

Global markets soared Monday after Macron topped the initial polls and looked well on course to beat far-right candidate Marine Le Pen in a run-off next month. 

There had been fears a win for the anti-European, anti-immigrant Le Pen could see France pull out of the euro and even the EU and precipitate its possible collapse.

US and European markets tracked an Asian advance Monday. On Tuesday the gains continued, with Tokyo and Seoul each jumping more than one percent and Hong Kong up 1.3 percent.

Shanghai, which has suffered a series of losses in the past two weeks on concerns about a government crackdown in leveraged investing, ended up 0.2 percent. Taipei and Mumbai also posted strong gains.

In early European trade Paris rose 0.2 percent a day after surging more than four percent, while London was flat and Frankfurt put on 0.2 percent.

Sydney and Wellington were closed for a public holiday. 

On currency markets the euro, which briefly broke $1.09 Monday for the first time in almost a month, was hovering around $1.0870, while it also held at 119.80 yen, well up from levels around 117 yen before France’s vote.

“With the market pricing in an amiable scenario for risk assets in the second round (of the French election), investors should continue to feed off this,” said Stephen Innes, senior trader at OANDA.

Now attention moves to the United States where Trump is due to unveil his much-vaunted tax overhaul Wednesday, which will call for cuts to personal and corporate rates, Bloomberg News quoted a White House official as saying. With AFP

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