Stocks rebounded Wednesday from a two-day slump, on rising expectations that China and the United States will soon reach an interim trade deal.
The Philippine Stock Exchange index, the 30-company benchmark, climbed 129 points, or 1.7 percent, to close at 7,836.89. It was also up 5 percent since the start of the year.
The broader all-share index gained 58 points, or 1.3 percent, to settle at 4,685.00, on a value turnover of P7.7 billion. Gainers outnumbered losers, 102 to 77, while 54 issues were unchanged.
Fifteen of the 20 most active stocks ended in the green, led by Jollibee Foods Corp. which jumped 7.5 percent to P197.90 and BDO Unibank Inc. which went up 4.7 percent to P157.
Other Asian markets also advanced Wednesday, with US President Donald Trump saying the talks were “in the final throes”.
However, observers said that while the broad consensus is that the two will tie up something soon, there is an underlying unease at the lack of detail that is causing uncertainty.
“We’re getting to the point where they need to show us the money,” said Michael Reynolds, investment strategy officer at Glenmede Trust Co. “Talk is one thing but an actual deal on paper, pen to paper, is what is going to dramatically change the market narrative.”
Regional investors were given another record-breaking lead from Wall Street, with comments from Beijing and Washington adding to the confident mood on trading floors.
Trump said on Tuesday: “We’re in the final throes of a very important deal, I guess you could say one of the most important deals in trade ever.”
He also raised the issue of unrest in Hong Kong, which has become a possible sticking point after Congress passed a bill supporting the pro-democracy protests and sent it to Trump to sign into law.
Progress on the bill has angered Beijing, however, and fueled concerns it could upend the trade talks.
Trump did not indicate whether he would put his name to the bill, instead emphasizing his close ties to Xi Jinping and efforts to seal the trade agreement.
“It’s going very well but at the same time we want to see it go well in Hong Kong,” he said. “I think it will. I think that President Xi can make that happen. I know him and I know he’d like to make it happen.”
Hong Kong rose 0.1 percent, with e-commerce titan Alibaba piling on 4 percent a day after its city debut that saw it rally more than six percent.
Tokyo ended 0.3 percent higher. Sydney jumped 0.9 percent and Singapore put on 0.1 percent, while Seoul and Taipei each added 0.3 percent.
Wellington climbed 0.7 percent and Mumbai put on 0.1 percent.
However, Shanghai fell 0.1 percent after data showed profits at industrial companies tumbled by a tenth on-year in October, highlighting continued problems in the world’s number two economy.
Still, while buying sentiment remains intact, investors remain concerned that the trade deal talks could collapse at the last hurdle, as they have in the past.
“Now it’s time for both leaders to schedule a venue and put pen to paper on the phase one deal officially,” said AxiTrader’s Stephen Innes.
“If there was ever a time to break bread, now is the time as investors are not piling into equities for health reasons, they’re expecting a substantial payout when the deal is finally signed sealed and delivered. And they certainly won’t be in the mood to be walked down that trade talk garden path only to run into another dead end,” he said. With AFP
