Philippine stocks bounced back Thursday from the previous day’s slump, as the benchmark index attempts to reach the 7,500 level.
The Philippine Stock Exchange index closed at 7,458.74, rallying by 96.12 points, or 1.31 percent, from Wednesday, while the all-shares index ended at 3,978.10, up by 38.46 points, or 0.98 percent.
COL Financial Inc. chief technical analyst Jaunis Barredo said the market showed signs of being “overstretched” after its recent climb.
He said the market might have risen too quickly, after the Bangko Sentral ng Pilipinas and the US Federal Reserve implemented rate cuts.
“Expect some short-term profit-taking and market rotation and be prepared for pullbacks to support,” Barredo said.
“Given the market’s change to a more bullish sentiment, look for opportunities to get back in once fresh technical setups are shown,” he said.
Meanwhile, Regina Capital Development Corp. head of sales Luis Limlingan said the market went up after the Asian Development Bank said it was maintaining its GDP [gross domestic product] growth forecast for the Philippines at 6 percent for 2024 and 6.2 percent for 2025.
“The ADB attributed this outlook to easing inflation and expected policy adjustments that could stimulate domestic demand,” Limlingan said.
Mining and oil was the only sectoral index that ended in the negative territory, declining by 0.34 percent.
Financials climbed 2.59 percent, followed by holding firms which advanced by 1.07 percent.
Bank of the Philippine Islands was the top index gainer, rising by 4.55 percent to P138, while Ayala Land Inc. was the main laggard, dropping by 0.91 percent to P38.05.
Meanwhile, Hong Kong and Shanghai led another rally across markets on Thursday as China unveiled further economy-boosting measures following a raft of stimulus this week.
The gains were supported by a tech surge following a strong earnings outlook from US chip giant Micron and as South Korean behemoth SK hynix said it had started mass production of a more advanced artificial intelligence chip.
The positive sentiment on trading floors comes ahead of the release of the Federal Reserve’s preferred gauge of inflation, which could play a role in officials’ plans for interest rates, following last week’s mood-boosting bumper cut.
China announced a fresh batch of measures to boost jobs — particularly among young people — and help the poorest with handouts, while Bloomberg reported leaders were considering pumping more than $140 billion into its large state-run banks.
The move, which aims to give them more room to support the economy, would mark the first since 2008 during the global financial crisis.
President Xi Jinping and other leaders said after a top-level meeting on Thursday they would address property-sector worries and improve care for the elderly and children.
That came after they admitted that “some new situations and problems have emerged in the current running of the economy”, according to state media.
This week’s stimulus represents a “shift towards a more aggressive easing stance, given the sustained weakness in domestic growth”, said JP Morgan Asset Management global market strategist Chaoping Zhu.
“The sense of urgency may convince investors that more policy support is on its way.”
But while the policies were broadly welcomed, analysts warned much more is needed.
“There is no silver bullet that can bring China back to the double digit growth levels markets have been used to,” said Charu Chanana, head of FX strategy at Saxo Capital Markets.
“There is no single policy step that will resolve China’s structural issues of debt, deflation and demographics. But the direction of travel is encouraging, and this can help to repair some of the confidence levels in the economy and policymakers.”
Tech shares rocketed, having been the main driver of a surge in global markets this year — pushing several to record highs — as demand for all things AI heats up.
The latest jump came after Micron Technology unveiled on Wednesday better-than-expected sales and profit forecasts, which ramped up hopes for demand for AI gear.
That was followed Thursday by reports that SK hynix had started producing the new, advanced chips, pushing its stocks more than eight percent higher in Seoul.
There were also big gains for Samsung and Japan’s Sony, while e-commerce titan Alibaba and JD.com joined the tech surge in Hong Kong.
Tokyo closed up 2.8 percent as exporters were helped by the yen hitting 145 per dollar for the first time since the start of the month.
Hong Kong and Shanghai continued to build on the week’s strong advance by climbing more than three percent, with the latter topping 3,000 points for the first time since July.
In Hong Kong, property firms were boosted on news of the help for the real estate sector, with Sunac, Agile Group, Fantasia and Sino-Ocean Group up between 20 and 30 percent.
Markets in Sydney, Seoul, Singapore, Wellington, Taipei, Manila and Mumbai were also well up, along with London, Paris and Frankfurt.
Attention is also turning to Friday’s release of US personal consumption expenditure figures.
Debate is swirling on the Fed’s next move after last week’s 50-basis-point rate cut, and further easing in the PCE could boost the chances of another big move. With AFP
