The stock market advanced Wednesday in step with the rest of Asia after the Federal Reserve slashed interest rates to combat the economic fallout from the coronavirus.
The Philippine Stock Exchange Index climbed 76.72 points, or 1.1 percent to 6,867.26 on a value turnover of P6.1 billion. Losers, however, beat gainers, 123 to 74, with 37 issues unchanged.
Metropolitan Bank & Trust Co., the second-biggest lender in terms of assets, rose 4.9 percent to P56.10, while Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, hospitals and infrastructure, increased 4.2 percent to P3.44.
JG Summit Holdings Inc. of the Gokongwei Group, rose 4.1 percent to P71, while Manila Electric Co., the largest retailer of electricity, advanced 3.7 percent to P267.40.
Most Asian equities, meanwhile, rose Wednesday, brushing off a Wall Street sell-off that was fueled by concerns the central bank was panicking.
All three main indexes on Wall Street ended almost three percent down.
However, Asian investors battled to build on the previous day’s gains and Tokyo ended up 0.1 percent, while Shanghai added 0.6 percent. Singapore, Wellington, Taipei, and Bangkok also rose, with Jakarta up two percent on hopes for further Indonesian government stimulus.
Seoul was the standout, surging more than two percent as South Korea—which is the worst hit country outside China—reported a sharp drop in new cases of the virus.
But Hong Kong dipped 0.1 percent in the afternoon as a gauge of Hong Kong manufacturing, construction, wholesale, retail and services fell to its lowest level on record in February.
The market was being supported by the city’s de facto central bank cutting rates with the Fed owing to the local dollar’s link to the US unit.
Sydney shed 1.7 percent, while was Mumbai also off.
The surprise cut came as central banks around the world pledge to do what they can to mitigate the fallout from the disease, which continues to spread to new countries and is crippling economic activity.
In announcing the reduction, the bank said US fundamentals “remain strong” but warned that the “coronavirus poses evolving risks to economic activity,” the Federal Open Market Committee said in a statement.
The move, which came two weeks before the Fed’s next planned policy meeting, initially sent Wall Street rallying but traders soon reversed course as they grew increasingly nervous about the economic outlook.
It also followed a much-anticipated but eventually underwhelming conference call between G7 finance ministers, which said only that they would use “all appropriate policy tools” to keep the virus epidemic from throttling growth.
Analysts questioned the Fed’s timing.
“The decision by the Fed was misguided from an image point of view as it gave off the impression they are extremely worried about the coronavirus situation,” said CMC Markets analyst David Madden. “And that’s why US stocks fell, as traders picked up on that nervousness. Cutting rates in rushed fashion projects the wrong image.” With AFP