Stocks rose Tuesday, after a broadly positive lead from Europe and Wall Street, ahead of comments later this week by US Federal Reserve Chair Janet Yellen.
The Philippine Stock Exchange index, the 30-company benchmark, rose 20 points, or 0.3 percent, to close at 7,858.14, as five of the six major sectors advanced.
The heavier index, representing all shares, rose 1 point to settle at 4,714.15, on a value turnover of P7.2 billion. Losers outnumbered gainers, 118 to 86, while 50 issues were unchanged.
Twelve of the 20 most active stocks ended in the green, led by hotel operator Waterfront Philippines Inc. which jumped 13.5 percent to P1.18 and developer Filinvest Land Inc. which climbed 3.3 percent to P1.88. Port operator International Container Terminal Services Inc. went up 3.2 percent to P104.20.
Meanwhile, Asian dealers remained upbeat after Friday’s surprisingly strong US jobs data that analysts said has put the Federal Reserve on course for at least one more interest rate hike this year, boosting the dollar.
Eyes will now turn to Fed boss Janet Yellen’s congressional testimony this week for a better handle on the bank’s plans for rates as well as winding down its other stimulus put in place during the financial crisis.
However, the key catalysts for business this week will be the beginning of the corporate report season, with big-name firms including JP Morgan, PepsiCo and Citigroup in line.
“Looking ahead, we think improving corporate earnings are the key ingredient needed to sustain the equity bull market,” said Bob Doll, senior portfolio manager and chief equity strategist at Nuveen Asset Management Llc.
“And with economic growth prospects looking solid, we think earnings can climb,” he told Bloomberg News.
Tokyo ended 0.6 percent higher while Hong Kong surged 1.5 percent in the afternoon and Sydney put on 0.1 percent.
Seoul added 0.6 percent, with Taipei more than one percent up and Wellington 0.6 percent higher. However, Shanghai eased 0.3 percent and Singapore gave up 0.6 percent.
Bets that US borrowing costs will rise further continue to underpin the dollar, which held gains against the pound and euro.
However, while it pushed up against the yen, it has struggled to break out, despite the widening gap between US and Japanese monetary policy.
Stephen Innes, senior trader at Oanda, said in a note: “By all accounts with the Bank of Japan and Fed divergence still on the cards, [the dollar] should be trading higher.”
But he said that ongoing geopolitical fears following North Korea’s missile test last week and questions about Japanese Prime Minister Shinzo Abe’s future after recent scandals and an election setback “are weighing on Japanese investors as a drive for downside protection enters the psyche”.
He added: “It appears these fears are tempering USDJPY upside despite the Fed maintaining its tightening conviction, and BoJ [keeping] its easing bias.”
Oil prices edged up for a second day after last week’s losses, supported by an expected drop in US stockpiles but there are warnings of uncertainty owing to heavy production by the US and other countries not signed up to the OPEC-Russia cuts.
“The market is likely to see continuing volatility,” David Lennox, a Sydney-based resource analyst at Fat Prophets, said. With Bloomberg, AFP