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Market surges; banks lead rally

The stock market rose sharply Wednesday as investors tracked Wall Street’s best performance in more than six months thanks to a healthy round of earnings reports.

The Philippine Stock Exchange Index jumped 112.66 points, or 1.6 percent, to 7,099.68 on a value turnover of P5.7 billion. Gainers overwhelmed losers, 129 to 57, with 46 issues unchanged.

Banks paced the rally, with BDO Unibank Inc., the biggest lender in terms of assets climbing 3.7 percent to P116.10. Security Bank Corp., the sixth-largest, advanced 4.1 percent to P152, while Metropolitan Bank & Trust Co., the second-biggest, gained 2.5 percent to P67.25.

Universal Robina Corp., the largest snack food maker, surged 7.6 percent to P148, while parent JG Summit Holdings  Inc. of industrialist John Gokongwei rose 3.2 percent to P48.50.

The rest of Asian markets, meanwhile, staged a much-needed rally Wednesday.

Bargain-buyers took advantage of the strong readings from some of the world’s top firms to step back into the mix, with a dip in US Treasury yields and Washington’s announcement of trade talks with Japan, the EU and Britain helping sentiment.

The news helped distract from long-running worries about the US-China trade war which shows no sign of abating.

Investors are now awaiting the release later in the day of minutes from the Federal Reserve’s most recent policy meeting, hoping for some insight into its plans for interest rates in light of fresh strong data on the US economy.

All three main indexes in New York piled on more than two percent Tuesday, the best daily performance since March, in response to a string of positive results from the likes of Netflix, Goldman Sachs, Johnson & Johnson and UnitedHealth Group.

And the gains filtered through to Asia, where Tokyo ended 1.3 percent higher thanks to a pick-up in the dollar against the yen, while Shanghai gained 0.6 percent.

Sydney, Seoul, Singapore and Wellington each put on more than one percent.

Hong Kong was closed for a public holiday.

“The earnings that came through overnight definitely is something the market has been waiting for to really change the sentiment,” IG Asia market strategist Jingyi Pan told Bloomberg TV.

But Stephen Innes, head of Asia-Pacific trade at OANDA, said: “Perhaps a bit surprising is that local equity markets are not exactly knocking it out of the park this morning.

“I suspected they would take their lead from the US equity froth. But again, local dealers remain a better seller of risk until a definitive shift in US-China trade tensions is offered up.”

On currency markets the dollar was down against most high-yield and emerging market economies as traders came out of their shells after recent selling.

Ray Attrill, head of forex strategy at National Australia Bank, suggested US President Donald Trump’s latest outburst against the Fed’s rate hikes, which he claims are excessive, were weighing on the dollar.

“While such name calling shouldn’t mean anything in terms of what the Fed actually does, it is a factor which somewhat undermines sentiment towards the dollar,” he said. With AFP

Topics: Stock Market , Philippine Stock Exchange , PSE , Philippine Stock Exchange Index , PSEi
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