The stock market jumped Monday, boosted by falling oil prices in the world market and the latest interest rate hike that that could have successfully tempered rising inflation.
The Philippine Stock Exchange Index surged 186.92 points, or 2.6 percent, to 7,270.26 on a value turnover of P8.3 billion. Gainers beat losers, 107 to 81, with 49 issues unchanged.
The Organization of Petroleum Exporting Countries may reduce output as “oil prices have entered into a bear market, falling over 20 percent from the peak in early October when Brent was at $86 per barrel,” said Margaret Yang Yan, market analyst at CMC Markets Singapore.
Traders are also betting a rate hike last week by the central bank will help attract more foreign investment and temper inflation.
GT Capital Holdings Inc. of tycoon George Ty advanced 6.6 percent to P860, while Megaworld Corp., the biggest lessor of office spaces, climbed 6.2 percent to P4.62.
PLDT Inc., the largest telecommunications firm, rallied 6.1 percent to P1,236, while ISM Communications Corp., a member of the group that was selected as the country’s third major telecommunications company, rose 5 percent to P8.20.
The rest of Asian markets mostly rose Monday but investors were keeping a close eye on the China-US trade row after Donald Trump’s optimistic comments on a possible deal were offset by a war of words between his vice president and Xi Jinping.
Still, investors in Asia were in a buying mood Monday as they picked up bargains.
Hong Kong rose 0.6 percent and Shanghai added 0.9 percent while Tokyo ended 0.7 percent higher.
Seoul gained 0.4 percent and Taipei added 0.3 percent. However, Sydney and Singapore each dropped 0.6 percent and Wellington eased 0.2 percent.
The mood across the region was a little calmer at the start of the week, providing some much-needed support after the volatility of seven days ago, with oil stabilizing and the Federal Reserve tempering fears about its plans for interest rate hikes.
US markets provided a positive lead after Trump said Friday that Beijing had made overtures toward resolving their trade war, meaning he might hold off imposing another round of tariffs.
The president’s comments followed an indication from one of his top economic advisers that talks were underway ahead of a planned meeting at the G20 in Argentina at the end of this month.
However, hopes for an early agreement were jolted by a spat at the weekend APEC meeting between Mike Pence and Xi over China’s economic and regional ambitions, with the US vice president mocking Beijing’s “constricting belt” and a “one-way road” initiative.
Xi defended his scheme and hit out at Trump’s “America First” protectionist agenda, saying it was a “short-sighted approach” that was “doomed to failure.”
The stark differences between the two sides meant the APEC gathering ended without a final communique for the first time in its history.
There was also some support from comments by top Fed officials last week hinting at concerns about the global economic outlook, indicating they see signs of slowing that could affect their plans for raising borrowing costs. With AFP