Stocks rose Monday on hopes the US Federal Reserve would soon slow its pace of interest rate hikes, though the mood was darkened by worries over the China outlook after President Xi Jinping tightened his grip on power.
The PSE index, the 30-company benchmark, climbed 45 points, or 0.8 percent, to close at 6,028.79, as five of the six subsectors advanced.
The broader all-share index also went up 21 points, or 0.7 percent, to settle at 3,216.67, on a value turnover of P3.48 billion. Gainers outmatched losers, 91 to 76, while 55 issues were unchanged.
Seven of the 10 most active stocks ended in the green, led by PLDT Inc. which rebounded 3 percent to P1,535.00 and Ayala Land Inc. which rose 1.7 percent to P26.40.
Asian markets closed mixed, as the yen weakened against the dollar after a short rally as speculation swirled that Japanese authorities had stepped into forex markets again to support their currency for a second time in as many sessions.
Tokyo, Sydney, Seoul and Taipei led gains after a strong performance in New York that was sparked by a report the Fed could begin to take its foot off the pedal in its rate hike campaign.
The Wall Street Journal said some officials were keen to discuss a slowdown when they meet next month.
Markets have been hammered this year by fears that moves by the Fed and other central banks to fight decades-high inflation will spark a recession.
Officials had been expected to lift rates 75 basis points for a fourth successive time next month, while bets were increasing on another such move in December.
“The mere suggestion of the Fed stepping down from 75 basis points to a 50 basis point incremental rate hike in December produced a fierce rally in US equities, partial reversal of the recent surge in US Treasury yields and smart about-turn in the US dollar,” said National Australia Bank’s Ray Attrill.
While most equity markets across the region were well up, Chinese markets were hammered by the reshuffle at the top of government. Hong Kong shed almost six percent and Shanghai was two percent down.
Xi, who was at the weekend given a third five-year term as leader, handed key positions to loyalists who back his strategy of fighting Covid outbreaks with lockdowns and other strict measures.
The policy has been blamed for the sharp drop in growth in the world’s number two economy, and while data showed Monday that it expanded more than forecast in the third quarter, traders remain on edge.
In a speech to close the Congress on Saturday, Xi insisted his zero-Covid policy had been a success.
And he promoted Li Qiang, the architect of a two-month lockdown in Shanghai that crippled the financial hub’s economy, to the second most powerful post in the Communist Party.
“The market is concerned that with so many Xi supporters elected, Xi’s unfettered ability to enact policies that are not market friendly is now cemented,” Justin Tang of United First Partners said.
Tech firms were among the worst hit in the Hong Kong selloff, hammered in recent years by Xi’s crackdown on the sector that has scythed firms’ profits and wiped billions off their valuations.
E-commerce giants Alibaba and JD.com tanked more than 10 percent each, while Tencent lost more than nine percent. The Hang Seng tech index was eight percent down. With AFP
