The stock market recovered Wednesday to snap a three-day slump, with select blue chips leading the rally.
The Philippine Stock Exchange Index rose 78.51 points, or 1.1 percent, to 7,210.87 on a value turnover of P5.4 billion. Gainers edged losers, 93 to 92, with 60 issues unchanged.
Manila Electric Co., the biggest retailer of electricity, advanced 4.9 percent to P358.80, while major property developer Ayala Land Inc. climbed 3 percent to P40.50.
Security Bank Corp., the sixth-largest lender in terms of assets, gained 2.5 percent to P149.90, while Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, power generation and hospitals, added 2.4 percent to P4.80.
The rest of Asian markets were mixed Wednesday but the euro staged a mild recovery on hopes Italy and the European Union can ease a row that has fueled fears of another crisis in the eurozone.
Equity investors were shifting warily, with Tokyo down 0.7 percent after hitting a new 27-year high.
Hong Kong eased 0.1 percent after plunging more than two percent, Sydney put on 0.3 percent and Singapore gained 0.7 percent, while Bangkok rose. Jakarta shed 0.3 percent and there were also losses in Wellington, Taipei and Mumbai.
Shanghai and Seoul were closed for public holidays.
While the China-US trade spate simmers, the source of angst among dealers has moved to Rome after the populist government passed a purse-busting budget last week that drew a rebuke from Brussels and warnings to abide by EU rules on public spending.
That prompted Italy’s Deputy Prime Minister Matteo Salvini to threaten to seek damages for scaring off investors as the yield on government bonds surged, making it more expensive for Rome to borrow on international markets.
Traders were also spooked by comments from Claudio Borghi, the head of the lower house budget committee, that the euro was “not sufficient” to solve Italy’s money problems.
But the euro enjoyed a small rally Wednesday afternoon as Italian bonds edged back on reports in the country that Rome was willing to work on cutting some of its projected budget deficits.
However, Ray Attrill, head of foreign-exchange strategy at the National Australia Bank, said while “Italexit” concerns were overblown, he still thought there were possible problems for Rome.
“The more significant issue is the risk—albeit not immediate—of Italy being downgraded to ‘junk’ status by at least two of the major ratings agencies.
“(That) would have profound implications for the ability of investors with minimum credit rating restrictions—including global sovereign bond market index trackers—from holding Italian government debt,” he wrote.
And Justin Tyler, a director and portfolio manager at Daintree Capital, echoed the fears, warning of “political risks coming out of Italy,” adding: “You’re going to continue to see volatility in the euro.”
On currency markets the dollar held above 15,000 Indonesian rupiah after breaking the mark Tuesday for the first time since 1998 during the Asian financial crisis. With AFP