Stocks jump; Ayala Land, GT Capital up

The stock market jumped Wednesday on expectations the government will ease some containment measures amid a slowing virus infection rate.

The Philippine Stock Exchange Index surged 214.26 points, or 3.2 percent, to 6,841.69 on a value turnover of P9.5 billion. Gainers overwhelmed losers, 153 to 52, with 49 issues unchanged.

Major property developer Ayala Land Inc. advanced 5.6 percent to P36.95, while parent Ayala Corp. rose 3.9 percent to P810.50.

GT Capital Holdings Inc. of the Ty Group climbed 4.8 percent to P615, while SM Prime Holdings Inc. of the Sy Group gained 4 percent at P38.05.

Oil prices, meanwhile, extended their rally Wednesday on growing expectations for demand as the global economy recovers, though equity investors trod a more cautious line with inflation fears still casting a shadow over trading floors.

The bump in oil has given a fillip to energy firms, though broader markets in Asia struggled to build on recent gains.

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

The mixed performance followed a tepid lead from Wall Street, with analysts saying a slow rebound in US employment take-up dampened spirits.

While some countries are struggling in their battle with the coronavirus, the general mood among dealers is upbeat with the global economy rebounding sufficiently strongly as vaccines are rolled out and parts of the planet slowly return to a semblance of normality.

And one of the biggest beneficiaries of that is the crude market, with demand for the commodity picking up as people begin traveling again and factories restart.

Both main contracts have rocketed from the dark days of last April—when they crashed in reaction to the imposition of lockdowns around the world—helped by top producers slashing output.

But with the world recovery now on track, the 23 oil-rich nations of the so-called OPEC+ group are confident that demand will increase enough for them to open the taps further.

On Tuesday, the group agreed to continue lifting output in July, having started slowly doing so in early May.

“The demand picture has shown clear signs of improvement,” said Saudi Energy Minister Prince Abdulaziz bin Salman.

Russian Deputy Prime Minister Alexander Novak said: “We see that demand has increased, that prices have stabilised,” and spoke of a “normalization” of the global economy.  

That came after the International Energy Agency said the second half of the year could see a gap between demand and supplies, which could push prices even higher.

However, the group gave little away about plans for August and its views on the possibility of Iranian oil coming back to the market if Tehran seals a nuclear deal with world powers that will lift sanctions on the country.

WTI on Tuesday rose to $68.87—its highest level since October 2018—while Brent peaked at $71.34, before they pared gains. They continued to be supported in Asian trade Wednesday, rising from their closing prices, and observers suggest they could break higher. With AFP