Stocks surge; Manila Water rallies

The stock market jumped for the third straight day Thursday, joining the rest of Asia as investors bought oversold stocks that earlier sent the benchmark index to over-a-year low.

The Philippine Stock Exchange Index surged 153.66 points, or 2.1 percent, to 7,506.51 on a value turnover of P7 billion. Gainers beat losers, 115 to 70, with 46 issues unchanged.

Manila Water Co. Inc. extended its rally, advancing 9.8 percent to P14.96, while SM Prime Holdings Inc. of the Sy Group climbed 5.9 percent to P41.95.

Manila Electric Co., the biggest retailer of electricity, rose 5.9 percent to P291, while PLDT Inc., the largest telecommunications firm, increased 4.1 percent to P1,093.

Asian markets rallied again Thursday despite the China virus claiming hundreds of lives and infecting tens of thousands, with investors welcoming strong US jobs data and Beijing’s decision to slash levies on US imports.

Equities gained across the board on building optimism that the outbreak, which has spread to more than 20 countries, can be contained and the economic impact limited.

After last week’s big losses, and a near eight-percent drop in Shanghai on Monday, observers said traders have been coming back on relatively low valuations, with reasonably healthy earnings reports also providing much-needed support.

Analysts generally have expressed confidence the illness will be largely contained to China and the economic harm will not be lasting.

Huge cash injections by the Chinese central bank into the country’s financial markets have also soothed investor concerns.

“The markets are not only holding up, but they’re going up,” said AxiCorp analyst Stephen Innes. “And to suggest risk appetite continues to ‘creep’ back in favor might be the biggest understatement of the week as equity markets just burst higher.”

He added that while the World Health Organization has played down reports that a cure might soon be developed, “any progress on treatment may also be a comfort to investors that the longer-term secondary effects of the outbreak are contained.”

In afternoon trade, Hong Kong—which lost almost six percent last week—surged 2.6 percent, having risen about as much over the two days previously. Shanghai ended 1.7 percent higher and Tokyo climbed 2.4 percent.

Seoul rallied 2.8 percent, Sydney climbed 1.1 percent and Taipei piled on 1.5 percent, with Mumbai, Bangkok and Jakarta also well up.

Markets cheered China’s announcement that it would halve levies on $75 billion worth of US imports after the two last month signed their mini trade deal that dialed down a long-running and painful trade war.

The move is aimed at “promoting the healthy and stable development of China-US economic and trade relations,” the State Council Tariff Commission said in a statement.

Until last week’s virus-linked sell-off, markets had been enjoying a bright start to the year because of the agreement, which paused the tense standoff between the world’s top two economies that had damaged global growth.

Investors were already on a roll with another surge on Wall Street where the S&P 500 and Nasdaq chalked up new records after figures showed private firms added a forecast-smashing 291,000 new jobs last month, marking the biggest gain since December 2014. With AFP