Market rallies; Manila Water rises

Stocks rebounded Tuesday on bargain hunting as the market reached oversold levels after several days of decline.

The 30-company Philippine Stock Exchange Index rose 89.87 points, or 1.3 percent, to 7,226.90 on a value turnover of P9.6 billion. Gainers beat losers, 113 to 73, with 48 issues unchanged.

Analysts said bargain hunting emerged on attractive valuations and in anticipation of positive earnings.

“Coronavirus, the Middle East, Brexit, oil, Treasury Bills, regulatory risks, Taal and the China economy are, in addition to the onset of the Q4 2019 earnings cycle, the main narratives that investors will be glued to in the coming days and weeks,” said Justino Calaycay, research head of Philstocks Financial Inc.

Manila Water Co. Inc. surged 8 percent to P13.78, while parent Ayala Corp. added 3.4 percent to P740.50.

Universal Robina Corp., the biggest snack food maker, advanced 4.6 percent to P151, while BDO Unibank Inc., the largest lender in terms of assets, climbed 4.3 percent to P150.70.  

The rest of Asian markets rallied Tuesday with Shanghai bouncing back as bargain-buyers stepped in after the previous day’s rout, but trading floors remained anxious as China’s deadly virus claimed more lives.

Investors tracked gains on Wall Street and in Europe following last week’s rout, though focus remains on authorities’ efforts to contain an outbreak that has now infected 20,400 and killed more in mainland China than the SARS epidemic, which hammered Asian economies in 2003.

Having dived nearly eight percent on Monday, Shanghai stocks rose 1.3 percent, boosted by a central bank injection of almost $60 billion into the financial markets, which is on top of the $173 billion pumped in on Monday.

Hong Kong climbed more than one percent a day after data showed the city’s economy contracted last year for the first time since 2009, but at a slightly slower rate than feared. The gains were despite news that the city had seen the first death of a patient who had contracted the coronavirus.

However, casinos were deep in the red after Macau said it would close all gaming houses in the gambling hub for two weeks because of the outbreak. Wynn Macau, Galaxy Entertainment and Sands China were all down more than two percent.

Singapore, Seoul, Mumbai and Taipei all surged between 1.3 percent and two percent, while Sydney put on 0.4 percent and Jakarta added 0.7 percent. Tokyo finished 0.5 percent higher.

The virus has now spread to more than 20 countries. Several have imposed tough travel rules including banning flights to and from China, while the World Health Organization has declared a global health emergency.

In a rare admission, Beijing admitted “shortcomings and difficulties” in its response to the crisis, which many fear could slash growth in the world’s number two economy and impact other countries that rely on its supply chains.

Observers said China’s leaders were considering lowering their GDP forecasts for this year owing to the epidemic. With AFP