The stock market jumped Monday on fading expectations of a US interest rate increase this year.
The Philippine Stock Exchange Index surged 106.70 points, or 1.3 percent, to 8,069.81 on a value turnover of P7.3 billion. Gainers beat losers, 120 to 82, with 41 issues unchanged.
Banks drove the market higher, led by BDO Unibank Inc., Bank of the Philippine Islands and Security Bank Corp. BDO, the biggest lender in terms of assets, rose 1.3 percent to P114.70, while BPI, the fourth-largest, advanced 2.6 percent to P98.50. Security Bank Corp., the sixth-biggest lender in terms of capital, gained 1.4 percent to P222.
PLDT Inc., the largest telecommunications company, climbed 2.1 percent to P2,136, while Cebu Air Inc., operator of the biggest budget airline, advanced 4.3 percent to P113.70.
Shanghai equities, meanwhile, took a hammering from weak Chinese manufacturing data.
Friday’s report showing the world’s number one economy expanded just 1.2 percent year-on-year in April-June poured cold water on speculation the Federal Reserve will raise interest rates before year-end.
It also came hours after the Bank of Japan disappointed investors by deciding against ramping up its stimulus programme.
The two events stung the greenback, which ended Friday just above the 102 yen mark, well down from levels around 106 yen touched the day before.
In afternoon Asian trade, the dollar edged up slightly against the Japanese currency to 102.47. But it lost ground against the South Korean won, Indonesian rupiah and Malaysian ringgit, which jumped 0.8 percent.
“The [US growth] was a massive miss, so I’m not surprised by the huge dollar selloff that ensued,” Thomas Averill, a managing director in Sydney at Rochford Capital, told Bloomberg News.
“The immediate risk at the moment is for a bit of further weakness in the US dollar on the moderated monetary tightening view.”
Japan’s Nikkei ended up 0.4 percent, having recovered from early losses fuelled by the strong yen, while Taipei and Singapore posted healthy gains.
Hong Kong closed up 1.1 percent, Sydney ended 0.5 percent higher and Seoul jumped 0.7 percent.
But Shanghai ended down 0.9 percent after China’s official purchasing managers’ index of manufacturing activity indicated the sector shrank last month.
It was the first time since February that the official figures have shown a contraction. Economists surveyed by Bloomberg News had predicted it would flat-line.
Forex traders are expecting Japanese Prime Minister Shinzo Abe to outline Tuesday details of the government’s 28-trillion yen stimulus announced last week.
The likelihood of US interest rates remaining low supported Asia’s equity markets, however. With AFP