Stocks soared to a new 15-month high Wednesday, sending the benchmark index to 8,100 points near the record level, on signs the US and Japan will continue to reinforce their economies, buoying demand for riskier developing-nation assets.
The Philippine Stock Exchange index, the 30-company benchmark, advanced 75 points, or 1 percent, to close at 8,100.48 Wednesday. It was the highest finish since the bellwether settled at 8,127.48 on April 10, 2015.
The heavier index, representing all shares, also advanced 44 points, or 0.9 percent, to close at 4,822.70, on a value turnover of P8.6 billion. Losers outnumbered gainers, 100 to 93, while 48 issues were unchanged.
Fifteen of the 20 most active stocks ended in the green, led by Megawide Construction Corp. which climbed 3.9 percent to P10.70 and technology company Xurpas Inc. which advanced 3.6 percent to P17.96. Fastfood chain operator Jollibee Foods Corp. added 3.1 percent to settle at P258.
Meanwhile, Japanese stocks also soared after the country launched a massive stimulus package to kickstart the economy, but other Asian markets were more subdued as the Federal Reserve wraps up a key policy meeting.
Prime Minister Shinzo Abe unveiled the 28 trillion yen ($266 billion) program days before the Bank of Japan holds its own meeting that is widely expected to see it widen monetary policy.
The news comes after Abe promised to ramp up spending on the stuttering economy following Britain’s shock vote to leave the EU and a landslide parliamentary election win earlier this month that solidified his power.
Promises of support from governments and central banks around the world since the Brexit ballot last month have provided the foundation for big gains across equities markets in recent weeks.
“It seems big and it should probably do quite a bit for the Japanese economy. Whether it’s big enough, we’ll find out. The markets seem to be a little bit undecided whether it is or it isn’t,” Lothar Mentel, chief investment officer at Tatton Investment Management, told Bloomberg TV.
Tokyo stocks ended the day 1.7 percent higher, while the dollar rose to 105.70 yen from 105.01 yen in the morning before the announcement.
The BoJ concludes its gathering Friday and is widely tipped to unveil fresh stimulus as the world’s number three economy struggles and inflation is virtually non-existent.
But while expectations of new measures have boosted Japanese stocks and sent the yen tumbling — helping exporters — analysts warned of a sharp sell-off if policymakers disappoint.
“The key is whether the BoJ will surprise us again on Friday,” Alex Wong, director of asset management at Ample Capital in Hong Kong, said.
It “has surprised the market several times in the past few years so they are a little bit unpredictable. There may be a disappointment” if the BoJ fails to deliver extra stimulus, he said.
The immediate focus is now on the Fed, which concludes its meeting Wednesday. While it is not expected to announce any new policy measures, dealers are keen to find out its appraisal for the US economy and plans for interest rates in light of a string of positive data, including on jobs. With AFP, Bloomberg
