Stocks extend rally; ICTSI rises

The stock market rallied Friday for the fifth straight day on some encouraging data indicating that the economy is slowly recovering after a deep contraction in the second quarter of the year.

The Philippine Stock Exchange Index added 40.92 points, or 0.6 percent, to 6,685.69 on a value turnover of P10.1 billion. Gainers beat losers, 109 to 92, with 57 issues unchanged.

The government said inflation rate in October steadied at 2.5 percent from 2.3 percent in September, while exports climbed 2.2 percent in September to $6.22 billion from $6.08 billion in the same month last year, the first time they increased since the government declared a community lockdown in March to contain COVID-19.

International Container Terminal Services Inc., the biggest port operator owned by tycoon Enriquez Razon Jr. advanced 4.2 percent to P125, while Dito CME Holdings Corp., the third major mobile phone company, rose 3.7 percent to P6.11.

JG Summit Holdings Inc. of the Gokongwei Group climbed 3.3 percent to P71.85, while GT Capital Holdings Inc. of the Ty Group rallied 3.1 percent to P500.

Most Asian markets were mixed Friday after the week’s strong gains but traders remained upbeat as the chances of Joe Biden winning the US election increased and after the Federal Reserve indicated it could provide further economic support.

While Donald Trump again accused Democrats of committing voter fraud and his team launched a series of legal actions in various states, hopes a new stimulus package will eventually be passed were supporting sentiment.

Analysts said Tuesday’s election was good for equities as the expected Democratic sweep of Congress failed to materialize while Biden looked set to take the White House.

“The market reaction to the unfolding election news suggests that financial markets would prefer to see a constrained Biden presidency,” Paul O’Connor, at Janus Henderson Investors, said.

However, he added: “The economic backdrop to this election is one of an incomplete global recovery that remains threatened by the continued spread of Covid-19 in many major economies as well as fast-fading fiscal support measures.”

Asia’s surge stuttered as profit-takers set in ahead of the weekend.

Tokyo, Sydney, Seoul, Wellington, Taipei, Jakarta, and Mumbai all rose but Hong Kong, Shanghai, Singapore and Bangkok slipped.

Still, Axi strategist Stephen Innes said the mood remained buoyant.

“Equity markets’ impressive ability to switch narratives and stay optimistic, almost regardless of the outcome, suggests continued high resilience,” he said in a note.

A Biden presidency and Republican Senate likely means Democrats will not be able to push ahead with regulatory changes and tax hikes, which observers said were both good for stocks. 

Tech firms have fared particularly well as the sector had been considered vulnerable to more stringent political oversight.

And while lawmakers are expected to push through a new economic rescue package, it will not likely be as big as anything from a Democratic-led Congress, which National Australia Bank analysts said would put the onus on the Federal Reserve next year. With AFP