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Sunday, May 26, 2024

Stocks climb; GMA Network, GT Capital up

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Stocks bounced back Tuesday as concerns about the pace of expected Federal Reserve monetary tightening eased, while oil prices briefly pushed to new two-year highs above $75 on demand optimism.

The Philippine Stock Exchange Index rose 43.24 points, or 0.6 percent, to 6,870.41 on a value turnover of P5.2 billion. Gainers beat losers, 122 to 69, with 53 issues unchanged.

GMA Network Inc., the biggest broadcasting firm, surged 8.7 percent to P13.80, while GT Capital Holdings Inc. of the Ty Group, advanced 3.1 percent to P614.50.

Aboitiz Power Corp. of the Aboitiz Group climbed 2.7 percent to P24.90, while Jollibee Foods Corp, the largest fast-food chain, added 2.1 percent to P206.40.

Most Asian markets, meanwhile, rebounded Tuesday from the previous day’s sell-off.

Regional investors were sent scurrying Monday as they contemplated the US central bank’s latest projections for hiking interest rates in light of the country’s blockbuster economic recovery and sharp spike in inflation.

The Fed’s “dot plot” forecast indicated liftoff in 2023—a year earlier than first flagged—with some policymakers eyeing the end of 2022, while discussions on winding down its vast bond-buying program are likely in the next few months.

Ultra-loose monetary policy by the Fed and other central banks, along with massive government spending, have been key pillars of the rally across global equities enjoyed since their nadir in April last year.

Observers said sharp losses in New York on Friday were largely reversed at the start of this week as traders may have felt they had oversold, with the general consensus still that the world economy is well on the recovery track and accommodative policies will remain in place for the time being.

“The bigger picture is that the Fed is just beginning to adjust its policy stance,” Chris Iggo, at AXA Investment Managers, said. “The overall level of rates and liquidity should stay supportive for markets, but maybe less so than has been the case over the last year.”

Tokyo led Asian gains, rallying more than three percent and almost wiping out Monday’s losses, while Sydney and Jakarta were up more than one percent. Shanghai, Seoul, Taipei, Wellington, Mumbai, Bangkok and Jakarta also rose, though Hong Kong and Singapore struggled.

“If there is one thing the last 15 months has taught us, it is the power of the buy the dip strategy as central banks continue pouring free money into the world’s financial system,” said OANDA’s Jeffrey Halley.

Analysts said there was a lower level of angst on trading floors after less hawkish comments from a number of Fed policymakers.  With AFP

Fed boss Jerome Powell, in prepared remarks ahead of a House hearing Tuesday, pledged again the bank’s continued support to ensure the “sustained improvement” in the economy is extended.

“We at the Fed will do everything we can to support the economy for as long as it takes to complete the recovery,” Powell said in the testimony. With AFP

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