The stock market surged Monday following a strong lead from Wall Street and comments from Donald Trump’s top economic adviser hailing “positive” trade talks with Chinese negotiators.
The Philippine Stock Exchange Index jumped 142.37 points, or 1.8 percent, to 7,938.35 on a value turnover of P7 billion. Gainers beat losers, 113 to 72, with 62 issues unchanged.
Universal Robina Corp., the biggest snack food maker, advanced 6.5 percent to P172.50, while parent JG Summit Holdings Inc. climbed 6.1 percent to P67.40.
Conglomerate Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, railways and hospitals, rose 6.2 percent to P5.10. Kepwealth Property Philippines Inc. soared 42 percent in its market debut to P8.15 from the initial public offering price of P5.74.
The rest of Asian markets rallied Monday following a strong lead from Wall Street and comments from Donald Trump’s top economic adviser hailing “positive” trade talks with Chinese negotiators.
Optimism that central banks will provide fresh support to head off a global economic recession has also lent much-needed support to regional equities after last week’s sell-off, with eyes on an upcoming speech by Federal Reserve boss Jerome Powell for clues about its plans.
Investors were in an upbeat mood after White House chief economic adviser Larry Kudlow said that if talks between deputies from Beijing and Washington went well and “we can have a substantive renewal of negotiations” then “we are planning to have China come to the USA and meet with our principals to continue the negotiations.”
He added that high-level phone talks last week were “a lot more positive than has been reported”.
Trump provided further cause for hope by tweeting: “We are doing very well with China, and talking!”
Kudlow also raised the prospect of using cash taken from higher tariffs on Chinese goods to pay for tax cuts.
“This sort of recycling won’t clear the oceans of plastic or reduce global warming, but it is an elegant solution to reducing the pain of tariffs on the American consumer of China and may give equity markets a small boost as we start the week,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.
The remarks helped Asian traders build on New York’s rally. Hong Kong led gainers, surging more than two percent in the afternoon with dealers also cheered by three days of protests in the city passing off peacefully. Shanghai ended up 2.1 percent and Tokyo added 0.7 percent.
Sydney climbed one percent, Singapore put on 0.6 percent and Seoul jumped 0.7 percent with Wellington, Taipei and Jakarta deep in positive territory.
There remains a high level of concern about the global outlook and particularly the US economy after yields on 10-year US Treasury bonds slid last week below that of the two-year note, while the 30-year yield fell below two percent for the first time ever.
The so-called “inversion”―when short-term interest rates are higher than longer-term ones―is viewed as a harbinger of recession. With AFP