Market advances; DMCI up

Stocks rose for a second day amid strong buying on hopes of progress in the China-US trade talks, with President Donald Trump saying they were “going very well”.

The Philippine Stock Exchange index, the 30-company benchmark, climbed 84 points, or 1.1 percent, to close at 7,849.94 Friday.  It was also up 5.1 percent since the start of the year.

The broader all-share index also gained 49 points, or 1.1 percent, to settle at 4,741.49 on a value turnover of P4.5 billion.  Gainers outnumbered losers, 121 to 58, while 48 issues were unchanged.

Sixteen of the 20 most active stocks ended in the green, led by DMCI Holdings Inc. which rose 3.9 percent to P9 and Robinson Retail Holdings Inc. which added 2.8 percent to close at P79.90.

Meanwhile, most Asian equities also advanced as negotiators from the world’s top two economies kicked off much-anticipated talks on resolving their long-running tariffs row on a positive footing, easing worries that they might be cut short.

Without elaborating, Trump told reporters: “I will say I think it’s going really well. We had a very, very good negotiation with China.”

Adding to the positive vibes was news that Trump would meet China’s top trade envoy Liu He at the White House.

The developments allowed dealers to breathe a sigh of relief as tensions between the two sides appeared to be growing after the US put new restrictions on Chinese firms over human rights abuses and reports Beijing had narrowed the issues it was willing to discuss.

“The fog of trade war is beginning to lift, giving way to an air of trade optimism sweeping through global capital markets,” said Stephen Innes, Asia-Pacific market strategist at AxiTrader.

“Investors are starting to believe there is light at the end of the… tunnel as hope springs eternal.” 

Hong Kong led gains across Asia, jumping more than two percent, while Tokyo added more than one percent, and Shanghai and Sydney each put on 0.9 percent.

Singapore and Seoul both gained 0.8 percent, with healthy gains also recorded in Wellington, Manila, Mumbai and Jakarta.

In early trade London fell 0.2 percent but Paris rose 0.3 percent and Frankfurt put on 0.9 percent.

Talks are expected to resume on Friday with hopes they can at least lead to a delay in tariffs, due next week, being imposed on China.

“The prospect of US-China trade truce that results in the suspension of further planned tariffs increases is rightly welcome news,” Rodrigo Catril at National Australia Bank said.

“But as it is often the case, the devil will be in the detail,” he warned, adding that if the optimism is to last “a meaningful de-escalation in tensions is required”.

Markets are also getting some support from rare signs of progress in the Brexit saga after British Prime Minister Boris Johnson and his Irish counterpart Leo Varadkar said they could see a route towards striking a possible divorce deal.

After hours of talks regarding the vexed question of Northern Ireland, the two issued a joint statement that said: “Both continue to believe a deal is in everybody’s interest. They agreed that they could see a pathway to a possible deal.” 

While Varadkar said there were still hurdles to overcome, the news did provide some much-needed hope in the crisis after German Chancellor Angela Merkel was reported to have said Brexit talks were “close to breaking down”. With AFP