Stocks bounce back; Jollibee up

The stock market bounced back Tuesday as investors lock their focus on the resumption of China-US trade talks  this week, though hopes for success are being tempered by mixed messages from both sides.

The Philippine Stock Exchange Index rose 73.50 points, or 1 percent, to 7,756.72 on a value turnover of P6.9 billion. Gainers overwhelmed gainers, 116 to 66, with 51 issues unchanged.

SM Investments Corp. of the Sy Group advanced 3.3 percent to P1,007, while Jollibee Foods Corp., the biggest fast-food chain, climbed 2.7 percent to P226.

Alliance Global Group Inc. of tycoon Andrew Tan gained 2.8 percent to P10.60, while Aboitiz Power Corp. of the Aboitiz Group added 2.5 percent to P37.40.

The rest of Asian markets rose Tuesday. There has been a general feeling of positivity in recent weeks that a solution to the long-running tariffs saga can be found, providing some much-needed support to equities in the face of worsening economic data.

Hong Kong climbed 0.7 percent as dealers returned from a long weekend break to mixed US jobs data that eased concerns about a US recession while also keeping expectations for an interest rate intact.

The gains come despite more violent protests in the city, which closed down the subway system on Saturday and caused numerous businesses to shutter.

Shanghai ended up 0.3 percent following the week-long National Day celebrations, while Tokyo closed one percent higher.

Sydney and Singapore were each 0.5 percent higher, Seoul rose 1.2 percent, Taipei added 0.8 percent and Jakarta put on 0.4 percent. Wellington and Bangkok were also up.

Beijing’s top trade envoy Liu He is due to meet with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin from Thursday.

But observers warn it is unlikely progress will be smooth, with reports this week saying China had cut back on the number of areas it is willing to discuss, suggesting leaders sense weakness in the White House as Donald Trump faces impeachment proceedings and a slowing economy.

Trump said late Monday he preferred to strike a big deal. “We’ve come this far. We’re doing well. I would much prefer a big deal and I think that’s what we’re shooting for,” he told reporters.

And on Monday, the US said it was blacklisting 28 Chinese entities it accuses of being implicated in rights violations and abuses targeting Uighurs and other mostly Muslim minorities in the Xinjiang region. The move bars them from buying US products.

The meeting comes just over a week before a new round of punitive tariffs is due to be imposed on China.

“A large percentage of the market thinks China may roll the dice and take advantage of what they think is Trump’s weakened political state, trying to push negotiations” closer to next November’s presidential election, said Stephen Innes, Asia-Pacific market strategist at AxiTrader.

“In this context… Trump may decide to hardball the upcoming talks, suggesting there could be a high level of disappointment even relative to the market’s muted expectations.” With AFP