Stocks rally; PLDT, Globe and SM Prime top gainers

Stocks extended their gains Wednesday led by conglomerates, with news that Joe Biden’s multi-trillion-dollar spending plans were edging closer providing another colossal boost.

The Philippine Stock Exchange Index surged 143.33 points, or 2.2 percent, to 6,822.15 on a value turnover of just P1.8 billion. Gainers edged losers, 95 to 93, with 51 issues unchanged.

Globe Telecom Inc. of the Ayala Group, the second-biggest mobile phone company, jumped 14 percent to P2,600, while parent Ayala Corp. advanced 3.6 percent to P741.

PLDT Inc., the largest telecommunications firm, climbed 7.8 percent to P1,345, while SM Prime Holdings Inc. of the Sy Group rose 4 percent to P34.80. JG Summit Holdings Inc. of the Gokongwei Group gained 3.8 percent to P67.65.

The rest of the Asian markets were mixed Wednesday, with optimism offset by profit-taking after a strong start to the week.

The US Food and Drug Administration’s decision Monday to give full approval to Pfizer-BioNTech’s vaccine has given a huge lift to sentiment and eased worries about the fast-spreading Delta variant in the world’s top economy.

That came as some countries including the United States see infection spikes easing, while China appears to have overcome a weeks-long outbreak. Still, others such as Australia, Japan, and New Zealand remain in a tough battle with the disease, forcing them into containment measures.

The FDA move “is paving the way for organizations to mandate vaccines for workers and thus lift vaccination rates higher,” said National Australia Bank’s Tapas Strickland.

“China’s Delta outbreak also appears to be under control with two consecutive days of no new domestic cases (only one suspected case), while the PBoC vowed to boost credit support for smaller businesses and the real economy.”

Wall Street enjoyed another strong day, with the S&P 500 at a record and the Nasdaq topping 15,000 for the first time.

Asia picked up the baton but with smaller gains than those enjoyed on Monday and Tuesday.

Shanghai, Seoul, Sydney, Singapore, Wellington, Taipei, Mumbai, Bangkok and Jakarta all rose but Tokyo was flat. Hong Kong dipped after rising around three percent in the previous two days.

Buying was helped by news that Democrats in the House of Representatives had settled internal differences to push forward Biden’s massive spending bill.

While there remains a long way to go before it hits his desk to be signed, the agreement gets the president closer to realizing his near $5-trillion goal for updating US infrastructure and providing much-needed improvements to education, health care, and climate change resiliency.

“The House of Representatives is taking a significant step toward making historic investment that is going to transform America, cut taxes for working families, and position the American economy for long-term—long-term growth,” Biden said.

Focus is now on a speech by Federal Reserve boss Jerome Powell to central bankers and economists for the Jackson Hole symposium, with hopes for an idea about its plans for monetary policy with an eye on the Delta mutation’s possible impact on growth.

However, observers are generally of the view that the disease will only slow the global recovery rather than knock it off course. With AFP