The stock market extended its rally Tuesday for the third straight day on encouraging balance of payments figures, with select blue chips leading the advance.
The Philippine Stock Exchange Index advanced 61.42 points, or 0.8 percent, to 7,721.56 on a value turnover of P5.4 billion. Gainers edged losers, 97 to 94, with 45 issues unchanged.
The country’s BoP posted a surplus of $467 million in April, a reversal of the $270-million deficit recorded a year ago on higher remittances, foreign direct investments and income from the investments of the Bangko Sentral ng Pilipinas abroad. A healthier BoP position may strengthen the peso against the US dollar, which, turn, will reduce cost of imports in the Philippines.
Alliance Global Group Inc. of tycoon Andrew Tan climbed 6.8 percent to P14.74, while Manila Electric Co., the biggest retailer of electricity, gained 5 percent to P374.
Globe Telecom Inc., the second-biggest telecommunications firm, rose 4.8 percent to P2,114, while Jollibee Foods Corp., the largest fast-food chain, rallied 3.1 percent to P282.60.
The rest of Asian markets, meanwhile, mostly rose Tuesday but concerns about the Huawei row and broader China-US trade war kept investors on edge, with analysts warning the crisis could rumble on for some time.
Sydney rose 0.4 percent, Seoul added 0.3 percent and Taipei was 0.7 percent higher, with Mumbai, Bangkok and Jakarta all in positive territory.
But Tokyo ended down 0.1 percent, Hong Kong dropped 0.5 percent and Wellington closed off 0.2 percent.
Regional investors were spooked by a sharp drop in New York’s tech-rich Nasdaq after Google said it was beginning to sever ties with the Chinese telecoms giant, days after Donald Trump’s decision to bar it from the US market and put it on a sales blacklist.
The Huawei development—with the US citing national security concerns—has muddied the waters in the tariffs stand-off between Washington and Beijing, which was thought to have been close to conclusion at the start of the month.
And now some observers are warning that stalled talks between the economic superpowers might not see any progress before a hoped-for meeting between Trump and China’s Xi Jinping at the G20 in June.
“The market was a little optimistic that a trade deal would just get done here this month,” Brett Ewing, chief market strategist at First Franklin Financial Services, told Bloomberg News.
Dealers have “definitely come to terms with a longer term trade negotiation process.”
While the Commerce Department issued a 90-day reprieve on the ban on dealing with Huawei, saying breathing space was needed to avoid huge disruption, the two appear to be digging their heels in.
And on Monday China’s envoy to the European Union called the Huawei move “wrong behavior,” adding “there will be a necessary response.”
Zhang Ming warned: “Chinese companies’ legitimate rights and interests are being undermined, so the Chinese government will not sit idly by.” With AFP