Philippine stocks zoomed more than 150 points Friday to close the week above the 6,800 level as investors cheered the rate reduction by the Bangko Sentral ng Pilipinas, signaling the start of monetary easing.
The 30-company Philippine Stock Exchange index closed at 6,847.37, after rising by 154.46 points or 2.31 percent from the previous day.
The all-shares index also ended at 3,691.42, up by 63.27 points, or 1.74 percent.
The Monetary Board on Thursday reduced its policy rate to 6.25 percent, the first in nearly four years.
Regina Capital Development Corp. head of sales Luis Limlingan said the positive sentiment was reinforced as Wall Street ended in the green as investors welcomed the stronger-than-expected retail sales and weekly jobless claims.
Limlingan said these factors eased investors’ concern over a potential US recession.
Value turnover improved to P6.67 billion.
All sub-indices ended the green, led by services which climbed by 3.12 percent, financials by 2.15 percent and property by 1.91 percent.
PSE president Ramon Monzon said he expects more active trading for the remainder of the year following the rate cut.
Monzon said the current pipeline of fund-raising activities in the local bourse include five follow-on offerings, one stock rights offering and an initial public offering, which could generate up to P48.36 billion in fresh capital.
“PSE continues to pursue projects that will sustain the company’s growth over the years. This includes the planned acquisition of the Philippine Dealing System Holdings Corp., which we target to complete in the next few months,” Monzon said.
Meanwhile, Asian markets mostly rose Thursday, with strong retail sales data dispelling worries about the strength of the US economy.
Retail sales in the United States soared past analyst expectations in July, climbing by 1.0 percent, data showed.
A weaker than expected labor market report recently sparked market turmoil as it raised fears that the world’s biggest economy was in worse health than anticipated.
“Today’s news has been like turning on the light in a dark bedroom to discover that there are no scary monsters under the bed after all,” said Briefing.com analyst Patrick O’Hare.
Wall Street’s main stock indices rallied to end the day and the dollar rose more than one percent against the yen after the retail sales report was released.
Concerns that the US Federal Reserve had waited too long to begin cutting interest rates have seen speculation rise that it could make more than a quarter-point reduction at its next meeting in September.
But economist Michael Pearce of Oxford Economics said the retail sales numbers “signal continued resilience” and would keep the Fed on a path of gradual rate cuts.
Wednesday’s consumer price index data — the smallest 12-month increase since March 2021 at 2.9 percent — solidified expectations that the Fed would take action in September.
Shares in Walmart rose 6.6 percent after the retail giant reported a rise in revenues and raised its outlook for the year.
Given its vast size and presence across the United States, Walmart’s earnings are closely scrutinized for signs of the broader health of US consumers.
London’s FTSE 100 stocks index rose 0.8 percent amid growing expectations that the Bank of England will cut interest rates further after the nation’s economic output slowed slightly in the second quarter.
Britain’s economy grew 0.6 percent in the April-June period, down from 0.7 percent in the first three months of the year, official data showed Thursday.
Paris and Frankfurt stocks closed with gains of more than one percent.
Asia’s main indices rallied too, taking their cue from Wall Street gains on Wednesday’s slowing inflation data.
Markets were also digesting positive growth figures from Japan — with the world’s fourth-largest economy reporting a better-than-expected GDP rise of 0.8 percent for the second quarter.
Shares in Alibaba ticked up 0.1 percent in New York trading despite the Chinese e-commerce giant reporting a 29 percent fall in quarterly profit to $3.3 billion, as it battles sluggish consumption during an economic slowdown.
Alibaba runs some of China’s most popular e-commerce apps and its performance is widely considered an indicator of broader economic trends.
Data out of China showed the country’s industrial production slowing and unemployment rising in July, while consumer spending marginally beat analysts’ expectations.
Shares in Hong Kong ended the day flat. With AFP
