Market rises slightly; GT Capital up

Stocks rose slightly Thursday in step with the rest of Asia, after the Federal Reserve indicated it could soon cut interest rates, adding to optimism of a breakthrough in the China-US trade row.

The Philippine Stock Exchange Index added 5.41 points, or 0.07 percent, to 8,022.42 on a value turnover of P6.7 billion. Gainers outnumbered losers, 121 to 71, with 49 issues unchanged.

GT Capital Holdings Inc. of the Ty Group advanced 4.4 percent to P960, while Cemex Holdings Philippines Inc. climbed 6.8 percent to 2.84.

First Gen Corp. of the Lopez Group increased 4.1 percent to P25.45, while conglomerate Metro Pacific Investments Corp. rose 3.1 percent to P4.72.

Oil prices, meanwhile, extended already strong gains after Iranian claims it had shot down a US drone in its airspace added to geopolitical tensions.

The softer slant from the US central bank provided more support to global investors, who were already in buoyant mood after Donald Trump flagged positive talks with China’s Xi Jinping and said they would meet next week.

The prospect of lower borrowing costs lifted equity markets on Wall Street, while the yield on US Treasuries fell below two percent for the first time since 2016—having been above three percent in November.

Tokyo ended 0.6 percent higher as traders shrugged off a stronger yen, Hong Kong rose 1.2 percent and Shanghai finished 2.4 percent higher, with Sydney up 0.6 percent.

Singapore added 0.8 percent, while Taipei gained 0.1 percent, though Wellington and Jakarta were slightly lower.

After a much-anticipated meeting, Fed boss Jerome Powell said officials felt the case for a reduction had “strengthened,” citing the trade standoff with China and weak inflation, adding it would “act as appropriate” to support growth.

The bank also dropped the word “patient” in describing its assessment of economic data, fueling speculation of a reduction as soon as July.

“The forward guidance from the Fed was no longer about being patient but being pragmatic,” said Kerry Craig, global market strategist at JP Morgan Asset Management. “As inflation is taking longer to return to target and trade uncertainty is weighing on the global outlook, the Fed is singing a dovish tune.”

He added that Powell “walked a fine line, highlighting a level of confidence in the US economy, even as growth is expected to slow and vulnerabilities from global politics increase”, which was enough not to cause concern to traders.

Analysts at NAB bank said “the change in the Fed’s bias has encouraged the market to increase its expectations that a new round of easing is just around the corner.”

The news hit the dollar, which fell across the board on foreign exchanges with higher-yielding units boosted by a pick-up in risk sentiment. The South African rand was 1.8 percent higher, South Korea’s won gained 1.2 percent and Canada’s dollar rose 1.1 percent. There were also big gains for China’s yuan, the Australian dollar, the Thai baht and Mexican peso. With AFP

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