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Friday, March 29, 2024

Market retreats; Semirara, LT climb

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Stocks retreated Thursday, after a three-day gain, as investors await President Rodrigo Duterte’s State-of-the-Nation address on July 24.

The Philippine Stock Exchange index, the 30-company benchmark, shed 68 points, or 0.9 percent, to close at 7,904.34, as five of the six major sectors declined.

The heavier index, representing all shares, also tumbled 37 points, or 0.8 percent, to settle at 4,738.83, on a value turnover of P8.2 billion.  Losers outnumbered gainers, 131 to 63, while 65 issues were unchanged.

Six of the 20 most active stocks ended in the green, led by Wilcon Depot Inc. which rose 2.1 percent to P8.89 and LT Group Inc. which went up 2 percent to P17.50.  Semirara Mining and Power Corp. gained 1.8 percent to P165.20.

Meanwhile, Asian and European markets extended their latest rally Thursday following across-the-board records on Wall Street where traders were buoyed by another day of strong earnings.

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Better-than-forecast results from New York titans IBM and American Express helped to fuel a buying spree and allowed investors to look past the crises engulfing Donald Trump and his stalled legislative agenda.

All three major indexes ended at all-time highs, which provided a platform for Asia.

Japan’s Nikkei ended up 0.6 percent after the country’s central bank cut its inflation forecasts again meaning its easy money policies would remain in place, while Sydney added 0.5 percent and Seoul was 0.5 percent higher.

Shanghai rose 0.4 percent and Hong Kong added 0.3 percent to extend a rally into its ninth straight day.

But while investors are upbeat about the corporate outlook Trump’s travails, along with stuttering indicators including on inflation, are keeping the dollar at multi-month lows.

Hopes are quickly fading for the tycoon’s promises to boost the economy—which had fuelled a global rally after his November election—as the collapse of his key health care reforms this week throw his tax-cutting, big-spending plans into doubt.

The dollar enjoyed some small gains on profit-taking in US trade but was back under pressure Thursday as investors await the a policy meeting at the European Central Bank.

The euro had surged to a near 15-month high of $1.1583 Tuesday before dipping later in the day.

ECB chief Mario Draghi’s post-meeting statement will be pored over as an improving eurozone economy feeds speculation that the bank will start to soon reel in the vast stimulus measures.

“The risk today comes if Draghi puts his dovish hat on and suggests the program could simply be extended in its current form,” Craig Erlam, a senior market analyst at Oanda, said in a commentary.

“Traders seem so convinced of further reductions that the euro could be vulnerable to the downside if the central bank doesn’t follow through.

The Bank of Japan stood pat on its own policy, as expected, but slashed its inflation outlook and once again put back its forecast for hitting a two percent rate as it struggles to kickstart the world’s number-three economy.

Officials had originally set in 2013 a two-year timeline when unveiling the bank’s massive monetary easing program as part of Prime Minister Shinzo Abe’s push to kickstart growth in the world’s number-three economy.

“The BoJ has already pushed out the timeline several times. Now four years have passed, and there is no sign the inflation rate is rising,” Masaaki Kanno, chief economist at Sony Financial Holdings in Tokyo and a former BoJ official, told Bloomberg TV.  With AFP, Bloomberg

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