Stocks rebounded Tuesday to end a two-day slide, on reports that inflation rate settled at a 16-month low of 3 percent and investors welcomed news China’s top trade negotiator will lead a delegation to Washington this week despite Donald Trump’s threat to hike tariffs.
The Philippine Stock Exchange index, the 30-company benchmark, gained 48 points, or 0.6 percent, to close at 7,910.63 as five of the six subsectors advanced. The broader all-share index also climbed 26 points, or 0.6 percent, to 4,886.55 on a value turnover of P5.5 billion.
Gainers outnumbered losers, 100 to 86, while 50 issues were unchanged.
Thirteen of the 20 most active stocks ended in the green, led by Globe Telecom Inc. which jumped 6.7 percent to P1,990 on healthy earnings. Port operator International Container Terminal Services Inc. also climbed 6.6 percent to P136.40.
Equities across Asia were hammered Monday—led by Shanghai’s worst losses in three years—after the president’s warning fuelled by frustration at the slow progress in the talks.
Trump’s remarks shocked markets, coming just days after officials on both sides had sounded positive on the talks, with markets broadly expecting an agreement to be announced soon.
While some observers pointed out that such high-stakes moves are characteristic of Trump’s negotiating style and that they expect a deal to be agreed anyway, Oanda senior market analyst Jeffrey Halley remained cautious.
“Say what you want about the US president… but predictability and subtlety were never part of his election pledges,” he said in a note. “China has most certainly found this out the hard way and likely explains why they are still sending their full delegation to this week’s round of trade talks.
“I take much greater comfort in China’s pragmatism than the president’s Twitter account, but the markets should take a leaf from China’s playbook and not assume the president was merely bluffing,” he said.
Asian markets started Tuesday on a healthy note as investors took their lead from Wall Street but the rally began to flag in the early afternoon before China confirmed that Vice Premier Liu He will be part of the talks team this week.
While Beijing had said they would send representatives there were concerns Xi Jinping’s point man might not attend.
Shanghai surged out of negative territory to end 0.7 percent higher, having tanked more than five percent Monday.
Hong Kong also reversed course to sit 0.4 percent up in late trade.
Elsewhere Sydney added 0.2 percent, Singapore gained 0.9 percent and Taipei put on 0.8 percent, with Wellington and Mumbai also well up.
But Tokyo fell 1.5 percent as dealers returned after being off for six working days, while Seoul dropped 0.9 percent following a long weekend.
There remains a certain amount of concern about the talks, however, following a warning from US Trade Representative Robert Lighthizer that there had been an “erosion in commitments by China” and that tariffs were still due to be hiked Friday.
There is a broad expectation some deal will eventually be reached but how extensive it will be is unknown.
“Reality is setting in that they are not going to get the master deal, the grand deal that they are hoping for and there’s a lot of work to be done,” said Oliver Pursche, chief market strategist at Bruderman Asset Management. With AFP