Stocks rose for a fourth day, defying the downfall of other Asian markets amid worries over North Korea’s nuclear test, as the local market caught up with large gains posted by global equities in the previous week.
The Philippine Stock Exchange index, the 30-company benchmark, rose 14 points, or 0.2 percent, to close at 8,049.35, as five of the six major sectors advanced. The bellwether was also up 17.7 percent since the start of the year.
The heavier index, representing all shares, picked up 4 points, or 0.1 percent, to settle at 4,766.93, on a value turnover of P5.8 billion. Losers outnumbered gainers, 103 to 87, while 55 issues were unchanged.
Investors rushed to buy Philippine stocks after the back-to-back long weekends. “We’re playing catch up,” said Luis Limlingan, managing director at brokerage house Regina Capital Development Corp.
Fourteen of the 20 most active stocks ended in the green, led by construction firm EEI Corp. which surged 7.5 percent to P14.30, while miner Nickel Asia Corp. climbed 4.4 percent to P7.99. Restaurant chain operator Jollibee Foods Corp. rose 2.5 percent to P244.
Meanwhile, Asian equities were mixed, the yen and gold extended gains, and Treasuries rallied as traders digested reports of North Korean plans for a ballistic missile launch on the heels of Sunday’s nuclear test.
Japanese and South Korean stocks fell while they fluctuated elsewhere as the United Nations Security Council met to discuss the threat from Pyongyang. S&P 500 Index futures inched higher before American markets reopen after the Labor Day holiday and European equity contracts rose. Yields on Treasuries declined.
“Markets are a little bit bifurcated,” Mizuho Bank Ltd. head of economics and strategy Vishnu Varathan told Bloomberg Television. “They do realize that the tail risks are rather large, so in fact there is an adverse outcome, they are not well prepared for it, but they are also betting against that, which is exactly why they are buying the dips.”
There is a high chance North Korea will fire an ICBM missile before the Sept. 9 foundation day after the Pyongyang regime started moving such a weapon, Asia Business Daily reported Tuesday, citing unidentified intelligence officials.
North Korea was “begging for war” by testing a nuclear weapon over the weekend, the U.S. ambassador to the UN said. Nikki Haley demanded the strongest sanctions possible to bring the Kim Jong Un regime to heel.
Haley told an emergency Security Council meeting that Pyongyang was “begging for war” and called for the “strongest possible measures” against Kim Jong-Un’s regime.
Also, US President Donald Trump and his South Korean counterpart Moon Jae-In agreed to remove limits on the payload of the South’s missiles.
The test, which North Korea says was of a hydrogen bomb, came less than a week after it fired a rocket over Japan, while speculation mounts that it is preparing to launch another.
Sunday’s provocative test sparked heavy selling in Asian stocks Monday and markets were unable to stage any meaningful recovery on Tuesday.
Seoul was barely moved, having shed more than one percent the day before, while Tokyo dropped 0.5 percent by the break as exporters were weighed by the stronger yen.
Hong Kong was also flat and Shanghai, which managed to eke out gains Monday, eased 0.2 percent. Wellington and Singapore were slightly higher.
“Investors in Asia have limited leads to follow,” Citigroup analysts led by Johanna Chua wrote in a client note, according to Bloomberg News.
They added that the North usually ramps up the belligerence around key anniversaries, the next of which is expected on Sept. 9.
“Tension linger and it’s difficult for risk aversion sentiment to disappear,” Naoto Ono, a currency analyst at Ueda Harlow in Tokyo, said in a note.
Analysts said traders will be keeping an eye on Wall Street’s reaction to the latest events, having been closed Monday for Labor Day. With Bloomberg, AFP