The stock market rose slightly Thursday in cautious trading, with investors opting to buy select issues on worries about the state of the global economy.
The Philippine Stock Exchange Index added 15.35 points, or 0.2 percent, to 7,876.40 on a value turnover of P5.1 billion. Gainers beat losers, 120 to 78, with 46 issues unchanged.
Alliance Global Group Inc. of tycoon Andrew Tan gained 1.5 percent to P16.18, while conglomerate Metro Pacific Investments Corp. also climbed 1.5 percent to P4.79.
GT Capital Holdings Inc. of the Ty Group rose 2.1 percent to P980, while Phinma Energy Corp. advanced 3.6 percent to P1.46.
The rest of the Asian markets were gripped by volatility Thursday as investors grow increasingly worried about the state of the global economy, sending them rushing to safe-haven assets and fueling talk of possible recession.
The pound was managing to hold its own despite another night of drama in Westminster that saw Prime Minister Theresa May offer to resign if MPs backed her Brexit plan and lawmakers reject a series of alternative options on leaving the European Union.
After a stellar start to the year, equities are beginning to stumble with closely watched sovereign bond yields—key indicators of the state of the economy—flashing a warning.
The yields on government bonds—considered the most watertight investment in times of turmoil and uncertainty—have tumbled around the world while central banks are becoming more dovish on their outlooks.
This is most notable in the United States, where the Federal Reserve has lowered its rate hike expectations and 10-year Treasury bond yields are below those of three-month notes. The last time this happened was before the 2008 global financial crisis.
“We are worried about the short term because the Fed is as dovish as they can be in the short term,” Chris Harvey of at Wells Fargo told Bloomberg TV.
“Interest rates are coming down throughout the globe, fears of recession are starting to go higher. We don’t think those fears are founded—but you have to acknowledge that that’s going to weigh on markets in the short term.”
After a negative lead from Wall Street, Asia markets fluctuated.
Tokyo sank 1.6 percent as exporters were hit by a jump in the safe-haven yen, while Shanghai shed almost one percent.
Seoul dropped 0.8 percent and Taipei eased 0.1 percent, but Hong Kong gained 0.2 percent and Sydney rose 0.7 percent as they recovered from initial selling.
Singapore was up 0.3 percent, while Jakarta was also in positive territory.
Against this background, top Chinese and US negotiators held their latest round of trade talks in Beijing Thursday, with hopes the two economic superpowers can find a deal to end their long-running tariffs row.
And Jeffrey Halley, a senior market analyst at OANDA, warned the meetings were “taking on ever more importance.”
“An agreement between both parties is the key macro-economic event for (the first half of) 2019 and will dictate whether we have a slow and low global pullback or if the day of reckoning arrives much sooner and more aggressively,” he said in a note. With AFP
