Stocks rose Tuesday, bucking the downtrend in other markets, after the Asian Development Bank upgraded its 2016 and 2017 growth forecasts for the Philippines.
The Philippine Stock Exchange index, the 30-company benchmark, gained 12 points, or 0.2 percent, to close at 6,880.91, following a 2.5-percent slump Monday. Despite the gain, the bellwether was still down 1 percent since the start of the year.
The ADB, in a supplement to its Asian Development Outlook 2016 Update report, raised its growth forecast for the Philippines to 6.8 percent this year and 6.4 percent next year.
The broader all-share index also picked up 10 points, or 0.3 percent, to settle at 4,172.65, on a value turnover of P7.2 billion. Losers edged advanced, 88 to 87, while 47 issues were unchanged.
Twelve of the 20 most active stocks ended in the green, led by Metro Pacific Investments Corp. which jumped 3.7 percent to P6.48 and SM Prime Holdings Inc. which advanced 2 percent to P28.70. BDO Unibank Inc. added 1.8 percent to close at P114.
Meanwhile, Asian markets dipped Tuesday as attention turned to this week’s much-anticipated Federal Reserve meeting, while analysts said the recent Trump-fuelled rally may have been overblown.
Global stocks have surged since Donald Trump was elected US president as investors bet his plans for huge infrastructure spending and tax cuts will kickstart the world’s top economy.
However, with the Fed meeting looming trading floors have quietened, waiting to see if the central bank provides any forward guidance on its plans for 2017 after an expected interest rate hike.
“With a rate hike at this week’s [meeting] fully priced and given the strong rally in the dollar, we are likely seeing some paring of positions heading into the rate decision,” Khoon Goh, head of regional research at Australia & New Zealand Banking Group in Singapore, told Bloomberg News.
“Market participants are also reassessing whether the Trump rally has gotten a bit ahead of itself.”
By the break in Tokyo, the Nikkei was down 0.2 percent, having closed Monday at its highest level this year.
Hong Kong slipped 0.3 percent while Shanghai was 0.5 percent lower, with traders unimpressed by a better-than-expected read on Chinese factory output and retail sales.
Sydney was flat and Seoul put on 0.1 percent but Singapore and Wellington were all down.
The anaemic performance came despite record close for the Dow on Wall Street.
On foreign exchanges the dollar edged back against most high-yielding currencies having tapped multi-month highs against most over the past few weeks.
The Australian dollar, South Korea’s won and Indonesian rupiah were up between 0.2 percent and 0.3 percent.
The oil-dependent Malaysian ringgit surged more than two percent, tracking Monday’s surge in crude prices after the weekend agreement by non-Opec members to slash output.
Crude prices held up in Asian trade Tuesday but Jeffrey Halley, senior market analyst at Oanda, said it would likely struggle to break further up after Monday’s more than two percent gains.
“Oil speculators will need a continual stream of good news to maintain oil’s rally at these levels, as they run into a solid wall of producer hedging [selling] in the futures market,” he said.
“With US shale dusting off more rigs by the day, at these levels, expect this producer hedging to increase as oil grinds higher.” With AFP, Bloomberg
