Stocks rose for a second day, sending the benchmark index to a one-month high, after Congress passed a tax reform bill and Fitch Ratings upgraded the country’s debt score.
Congress ratified the tax reform bill raising levies on coal, cars, soft drinks and cosmetic surgeries to finance the country’s crumbling infrastructure.
The Philippine Stock Exchange index, the 30-company benchmark, jumped 101 points, or 1.2 percent, to close at 8,461.06 Thursday, as five of the six major sectors advanced. It was also up 23.7 percent since the start of the year.
The heavier index, representing all shares, also gained 56 points, or 1.2 percent, to settle at 4,938.54, on a value turnover of P7.6 billion. Gainers outnumbered losers, 110 to 103, while 33 issues were unchanged.
Sixteen of the 20 most active stocks ended in the green, led by gaming company Bloomberry Resorts Corp. which surged 6.7 percent to P11.20 and conglomerate GT Capital Holdings Inc. which climbed 5 percent to P1,270. SM Prime Holdings Inc. rose 3.6 percent to P37.80.
Meanwhile, the dollar suffered fresh losses on Thursday as Asian investors followed their New York counterparts in shifting out of the unit, unmoved by another interest rate hike and an upbeat assessment of the world’s top economy.
The fall in the greenback was mirrored in a broad sell-off in regional equities as traders ignored another record finish for the Dow on Wall Street.
The dollar was hit by selling after the much-anticipated central bank meeting, which provided little to excite buyers, despite tentative hopes US lawmakers are on course to push through market-friendly tax cuts.
The Fed lifted borrowing costs as expected and said economic growth would be stronger than initially forecast, while inflation would also improve. It also said its projections for three more rate rises next year were on course.
However, Marvin Loh, senior global market strategist at Bank of New York Mellon, told Bloomberg News: “Markets are generally interpreting the meeting as a dovish hike.
“The improved view in 2018 may be driven by tax reform, which will not have a long-lasting impact.”
A below-par reading on inflation added to selling in the dollar, which retreated against most other currencies in New York. It fell through the 113 yen mark, while the pound was above $1.34 and the euro broke $1.18.
On equity markets, Tokyo ended 0.3 percent lower as exporters were weighed by a stronger yen, while Shanghai dipped 0.3 percent and Singapore fell 0.8 percent.
Hong Kong gave up 0.2 percent, Sydney eased 0.2 percent and Seoul dropped 0.5 percent. Taipei and Wellington were all in positive territory.
Oil prices edged up but only made a small dent in Wednesday’s losses, which came despite another report showing US inventories had fallen.
“That suggests a lot of, perhaps all, the current news about tightness in the oil market is already priced,” said McKenna.
There are also worries that an output cap agreed by major producers in OPEC and Russia could be lifted next year. With AFP, Bloomberg