The Philippine stock market rebounded Tuesday as trade fears eased after the United States extended its tariff pause with China for 90 days.
The bellwether Philippine Stock Exchange index jumped 35.49 points, or 0.57 percent, to close at 6,289.85. The broader all shares index climbed 16.02 points, or 0.43 percent, to 3,751.27.
The peso depreciated slightly against the U.S. dollar to 57.075 on Tuesday from 57.04 on Monday.
U.S. President Donald Trump on Monday signed an executive order to extend the deadline for the implementation of higher tariffs for another 90 days.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the index also gained after the Bangko Sentral ng Pilipinas signaled two rate cuts are likely for the remainder of the year. The first rate cut could happen as early as August during the Monetary Board policy meeting.
Five of six sectoral indices ended in the green, led by holding firms, which rose 1.15 percent. This was followed by mining and oil, which advanced by 0.90 percent, and property, by 0.84 percent.
Financials, on the other hand, went down by 0.28 percent.
Value turnover reached P13.39 billion.
Market breadth was positive as there were 105 gainers versus 84 decliners, while 53 stocks remained unchanged.
Shares of JG Summit Holdings Inc. surged 6.6 percent to P25 after the company reported strong first-half results. Shares of Universal Robina Corp., on the other hand, declined 3 percent to P82.65. Jenniffer B. Austria
Asian stock markets mostly rose Tuesday, with Tokyo hitting a record, as investors welcomed the extension of a China-US tariff truce but looked ahead apprehensively to the release of key US inflation data later in the day.
Donald Trump’s widely expected trade announcement avoids the reimposition of sky-high levies and allows officials from Washington and Beijing to continue talking into November to settle their standoff.
In an executive order, the White House reiterated its position that there are “large and persistent annual US goods trade deficits” and they “constitute an unusual and extraordinary threat to the national security and economy of the United States”.
However, William Yang, an analyst at the International Crisis Group, said: “Beijing will be happy to keep the US-China negotiation going, but it is unlikely to make concessions.”
With the president’s tariffs set and talks with various trading partners ongoing, markets are now turning their focus back towards the possible economic outlook and the impact of Trump’s trade war.
First up is the US consumer price index (CPI) later in the day, which could play a major role in the Federal Reserve’s decision-making with regard to interest rates.
Bets on a cut have ramped up in recent weeks owing to signs that the world’s number one economy is showing signs of slowing, with figures indicating that the labour market softened considerably in the past three months.
Expectations are for CPI to come slightly above June’s reading, but analysts warned investors were walking a fine line with a forecast-topping print likely to dent rate cut hopes and a too-weak read stoking economic fears.
“I’d imagine, for equities at least, given the comfort blanket that the surge in September cut expectations has provided recently, that a hotter-than-expected figure could see some fairly sizeable downside,” said Pepperstone’s Michael Brown.
While there have been warnings that the tariffs will stoke inflation, National Australia Bank’s Ray Attrill said: “The larger tariff impacts… probably will not be felt until August/September, with firms now only gaining some clarity on the degree of reciprocal tariffs.
“The current profit reporting season has noted firms on the whole were waiting for greater clarity on final tariff rates before adjusting prices.”
Also on the agenda this week are wholesale prices and retail sales, with the Fed’s favoured gauge of inflation at the end of the month. Bank officials are then set to make their decision in the middle of September.
Forecasts are for a reduction at that gathering and one more before the end of the year.
Asia’s markets rally was led by Tokyo’s Nikkei 225, which briefly soared almost three percent to hit a record high of 42,999.71 on renewed optimism over the Japanese economy after officials reached a deal to avert the worst of Trump’s tariffs.
IwaiCosmo Securities said in a market commentary that “easing tensions over US-China trade talks, as well as speculation about the US’s imminent lowering of (interest) rates” had helped boost investors’ hopes about the recovery of Japanese companies.
The gains came as traders returned to work after a long weekend.
Hong Kong, Shanghai, Taipei, Mumbai, Jakarta and Manila also advanced with London, Paris and Frankfurt.
Sydney was also given a lift by news that the Australian central bank had cut interest rates.
Seoul, Singapore and Wellington dropped. With AFP
