Stocks rose Tuesday, as investors rediscovered their appetite for risk after the previous day’s losses fueled by Italian uncertainty.
The Philippine Stock Exchange index, the 30-company benchmark, gained 29 points, or 0.4 percent, to close at 6,806.14. Despite the rise, the bellwether was down 2.1 percent since the start of the year.
The heavier index, representing all shares, lost 1 point, to settle at 4,116.74, on a value turnover of P5.8 billion. Losers outnumbered gainers, 112 to 68, while 44 issues were unchanged.
Two of the six major indices advanced, including properties and holding firms. Seven of the 20 most active stocks ended in the green, led by Globe Telecom Inc. which rose 1.3 percent to P1,378 and SM Prime Holdings Inc. which picked up 1.1 percent to P26.80.
Meanwhile, Asian stocks rebounded Tuesday from a slump a day earlier. Regional markets were jolted and the euro tumbled to a 20-month low Monday after Prime Minister Matteo Renzi said he would resign after losing a referendum on constitutional reform.
But attention is now turning back to the Federal Reserve’s expected interest rate rise next week, with traders hoping it will give some indication of its plans for 2017 as US President-elect Donald Trump embarks on a big-spending program that will likely fan inflation.
“Investors shrugged off the anti-establishment messages from the Italian referendum to drive share prices higher,” Michael McCarthy, chief market strategist in Sydney at CMC Markets, told Bloomberg News.
“Attention now turns to the Fed’s interest-rate decision next week, the last listed major risk event for the year.”
The Italian result sent the European single currency crashing to $1.0506—its lowest since March 2015—before it bounced back as traders await more developments out of Rome. In afternoon Asian trade it bought $1.0750, having dallied earlier with $1.08.
However, concerns remain that political instability could scupper Italy’s efforts to resolve a bad loans crisis in the banking sector, and spark fresh eurozone turmoil.
On stock markets Tokyo ended 0.5 percent higher, while Hong Kong was up 0.7 percent in the afternoon. But Shanghai ended down 0.2 percent.
Sydney gained 0.5 percent, Seoul was 1.4 percent higher and Taipei put on one percent.
The gains were also prompted by the Dow’s second record close in three days, helped by a jump in activity in the key US services sector.
The renewed confidence provided support to Asia-Pacific currencies that have taken a beating in recent weeks because of growing expectations US borrowing costs will be increased more sharply than previously thought.
Australia’s dollar was up 0.4 percent against the greenback after the country’s central bank decided against cutting interest rates. But weak inflation figures dented earlier advances as policymakers kept an open mind about a cut down the line.
South Korea’s won added 0.3 percent and the Indonesian rupiah gained 0.6 percent, while the Malaysian ringgit, New Zealand dollar and Singapore dollar also posted healthy gains.
Oil prices turned lower as the surge that greeted last week’s output cut agreement between OPEC and Russia fades. With Bloomberg, AFP