Stocks rebounded Thursday from a three-day slump, on bargain-hunting after the benchmark index fell below the 8,000-point level a day earlier.
The Philippine Stock Exchange index, the 30-company benchmark, jumped 215 points, or 2.7 percent, to close at 8,124.45, as the six major sectors advanced. Despite the Thursday’s gain, the bellwether was still down 5.1 percent since the start of the year.
The heavier index, representing all shares, also climbed 101 points, or 2.1 percent, to settle at 4,890.17, on a value turnover of P8.4 billion. Gainers outnumbered losers, 122 to 75, while 47 issues were unchanged.
Sixteen of the 20 most active stocks ended in the green, led by property developer Ayala Land Inc. which went up 5.5 percent to P41.95 and conglomerate SM Investments Corp. which rose 5.3 percent to P980. PLDT Inc. gained 4.3 percent to P1,533.
Meanwhile, Tokyo stocks closed 1 percent higher as bargain-hunting after three straight days of losses offset a stronger yen.
The benchmark Nikkei 225 index edged up 0.99 percent, or 211.02 points, to close at 21,591.99, while the broader Topix index was up 0.65 percent, or 11.10 points, at 1,727.39.
The dollar extended losses in Asia on Thursday after the Federal Reserve stuck to its target for interest rate hikes this year, but fresh fears of a trade war hit equity markets as Donald Trump prepared fresh sanctions on China.
After one of the most anticipated meetings in recent months, the central bank lifted borrowing costs, as expected, to a decade high but indicated just two more over the rest of the year, confounding forecasts of three more.
Jerome Powell, in his first news conference since taking the helm, said the move was in response to a strong economic outlook that had been helped by December’s tax cuts, while improving jobs creation was lifting incomes and confidence.
In response, the dollar sank against most other units in New York and while the Fed also said it saw a more aggressive path of hikes over the next two years as the economy continues to strengthen, the US unit failed to bounce back. It extended the losses in Asia, with talk of a monetary tightening trend in Europe and Japan adding to its weakness.
“The statement would suggest it’s open season on the dollar and greenlights sellers to re-engage as the Fed failed to confirm any of the markets’ hawkish suspicions,” said Stephen Innes, head of Asia-Pacific trading at Oanda.
The Fed rate hike was followed by Hong Kong’s de facto central bank as the two are linked via a currency peg.
The dovish short-term outlook for US borrowing costs provided optimism for Asian investors initially before a broad rally fizzled.
Tokyo ended one percent higher after a three-day losing streak and Seoul closed up 0.4 percent.
But trading floors remain edgy as it emerged Trump is expected to hit China over what Washington calls “theft” of US intellectual property.
The move would further strain tensions with Beijing after the White House unveiled controversial tariffs on imports of steel and aluminum, which sparked fury from world leaders.
“The key risk is that it does not end with this modest baseline scenario” said Oxford Economics chief Asia economist Louis Kuijs, according to Bloomberg News.
“More measures may follow, and tit-for-tat responses could lead to escalation. Collateral damage in other economies will be significant and could further complicate the trade friction.” With AFP