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Friday, March 29, 2024

Stocks end slump; URC, BDO rise

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The stock market rose Thursday in a technical rebound to end a six-day slump, with select blue chips gaining on bargain hunting.

The Philippine Stock Exchange Index advanced 68.17 points, or 0.9 percent, to 7,517.37 on a value turnover of P6.1 billion. Losers, however, beat gainers, 123 to 72, with 45 issues unchanged.

Universal Robina Corp., the biggest snack food maker, climbed 2.6 percent to P143.70, while BDO Unibank Inc., the largest lender in terms of assets, also gained 2.6 percent to P117.

Aboitiz Equity Ventures Inc., which is into power generation and distribution, banking, food, shipbuilding property and infrastructure, rose 2.9 percent to P49, while Jollibee Foods Corp., the biggest fast-food chain, gained 3 percent to P277.

Hong Kong, meanwhile, led a rally in most Asian markets on Thursday after the US reached out to China in a fresh bid to avert a trade war, providing some much-needed respite to weary investors.

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News that Treasury Secretary Steven Mnuchin had invited top Chinese officials for talks comes just under a week after Donald Trump threatened to impose tariffs on all $500 billion worth of imports from China.

The president’s top economics adviser Larry Kudlow called the move a “positive thing” and added that “you could say that communication has picked up a notch.”

China’s commerce ministry on Thursday welcomed the offer and said the two sides were discussing details.

Hong Kong’s Hang Seng Index jumped 2.5 percent, having fallen for six straight days and into a bear market, which is a 20 percent drop from its January record high.

Shanghai climbed 1.2 percent, Seoul gained 0.1 percent and Tokyo ended one percent higher.

Wellington and Taipei were also higher, while Jakarta ran up 0.9 percent and Bangkok 1.6 percent.

But Sydney fell 0.8 percent and Singapore eased 0.2 percent.

“Markets should welcome the news of possible resumption of high-level trade talks between China and the US,” said Tai Hui, JP Morgan Asset Management chief market strategist for Asia-Pacific.

“This may reflect strong feedback from the US corporate sector against further expansion of the list of Chinese exports that would be subjected to higher tariffs.”

However, while he said the latest round of threatened tariffs could be delayed, he said Beijing had already agreed to buy more American goods to reduce its gaping surplus with the US and open up the economy further, so it might not be able to offer much more.

“The road to a more sustained resolution is still challenging,” Tai added.

And Stephen Innes, head of Asia-Pacific trading at OANDA, said “the playbook remains unchanged and it would be a total surprise for many market participants if the Trump administration didn’t follow through” with the next round of tariffs.

The tariffs are clearly starting to hit US and European firms based in China.

On Thursday, the American Chamber of Commerce in China said a survey found most US companies are seeing rising costs, lower profits and tighter scrutiny, and a separate poll of 200 EU companies in the country showed 17 percent are delaying investment or expansion plans. With AFP

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