Stocks rebounded slightly on Tuesday, following a blockbuster surge on Wall Street fueled by hopes for a concerted global response to the coronavirus disease 2019.
The Philippine Stock Exchange index, the 30-company benchmark, rose 41 points, or 0.6 percent, to close at 6,790.54. Despite the gain, the bellwether was still down 13.1 percent since the start of the year.
The broader all-share index also moved up 18 points, or 0.5 percent, to settle at 4,062.25, on a value turnover of P5.8 billion. Gainers outnumbered losers, 108 to 82, while 46 issues were unchanged.
Fifteen of the 20 most active stocks ended in the green led by Metro Alliance Holdings & Equities Corp. which surged 29 percent to P2.75.
Robinsons Land Corp. climbed 5.8 percent to P23 while BDO Unibank Inc. gained 3.9 percent to P137.20.
Most Asian stocks also rose Tuesday. Pledges of action from central banks around the world and a planned conference call between Group of Seven financial chiefs provided a much-needed boost to markets after last week’s hammering.
The positive sentiment filtered through to oil markets, where dealers are betting on major producers cutting output to address tumbling demand.
However, earlier gains were pared as investors fret over the effectiveness of monetary policy in the face of the virus, which continues to spread, with the US death toll jumping and the World Health Organization warning the world was in “uncharted territory”.
The disease has now killed more than 3,100 people and infected more than 91,000, though China– where it started—on Tuesday reported its lowest number of new cases in six weeks.
Shanghai and Sydney both rose 0.7 percent, while Seoul put on 0.6 percent.
Singapore and Mumbai edged up 0.3 percent, with Taipei and Manila gaining more than one percent, and Wellington, Bangkok and Jakarta more than 2 percent.
Tokyo, however, fell 1.2 percent, and Hong Kong was marginally lower.
In early trade, London and Paris each rose 1.5 percent, while Frankfurt added 1.4 percent.
“One feels… that the newly found optimism sweeping the markets has a fragile foundation,” said Jeffrey Halley at OANDA. “We have not seen the end of ‘peak gyration’ in markets yet.”
Traders were given a strong lead after Wall Street enjoyed its best day in more than a year as the Dow soared more than five percent, while the S&P 500 and Nasdaq piled on around 4.5 percent.
After last week’s rout, investors returned to buying as central banks from the US, Japan and Europe said they were ready to provide support with monetary easing such as interest rate cuts and cash injections to financial markets.
The US Treasury also announced that Secretary Steven Mnuchin and Federal Reserve chief Jerome Powell will lead a conference call with their G7 counterparts later Tuesday on how to respond to the virus.
On Tuesday, Australia cut borrowing costs to a record low and indicated it is ready to provide more help, making it the first major economy to take such measures.
Donald Trump jumped on the cut, using it to attack the Federal Reserve and renew his call for a similar move at home, saying: “Jerome Powell led Federal Reserve has called it wrong from day one. Sad!”
Malaysia also announced a cut on Tuesday. With AFP
