Stocks rose for a second day, on positive prospects for the local economy and expectations the US Federal Reserve will hold off hiking interest rates.
The Philippine Stock Exchange index, the 30-company benchmark, gained 112 points, or 1.7 percent, to close at 6,765.13 on Friday. The gauge, however, was still down 2.7 percent since the start of the year.
The heavier index, representing all shares, also advanced 54 points, or 1.4 percent, to settle at 3,868.61, on a value turnover of P7.4 billion. Advancers led losers, 106 to 54, while 53 issues were unchanged.
Eighteen of the 20 most active stocks ended in the green, led by conglomerate Metro Pacific Investments Corp., which climbed 6 percent to P5.70 and Metropolitan Bank & Trust Co., which jumped 5 percent to P75.30.
Chemical manufacturer D&L Industries Inc. rose 4.3 percent to P8.20, while port operator International Container Terminal Services Inc. added 4.3 percent to close at P58.70.
Meanwhile, growing fears that global economic turmoil is seeping into the United States kept pressure on the dollar Friday—boosting oil but hitting Japanese stocks—as investors bet the Federal Reserve will refrain from hiking interest rates this year.
After a tumultuous start to the year fuelled by a slowdown from Asia to South America, the focus now turns to the US, the world’s biggest economy and key driver of world growth.
The US has enjoyed reasonable results for the past few years in the face of a worldwide malaise, but a string of weak data out of Washington recently has led to speculation it is now in the firing line.
On Thursday, figures showed orders for manufactured goods fell again in December and jobless claims rose last week. That came after data pointing to a slowdown in factory activity, easing economic growth, a drop in consumer spending and weakness in the crucial services sector.
“Until now, the view on the US economy was that it was recovering, but the pace wasn’t as fast as hoped. Now there’s some concern in the market that it may actually be contracting,” Juichi Wako, a senior strategist at Nomura Holdings, told Bloomberg News.
Eyes are now on the release later in the day of a jobs report with a weak reading likely to reinforce worries about the economy and possibly force the Fed to keep borrowing costs on hold.
“Expectations are growing by the day that the Fed will not hike again this year given the weaker growth picture and tightening financial conditions,” Jason Wong, a currency strategist in Wellington at Bank of New Zealand Ltd., said in an email to clients. “The key release is US employment data.”
With a rate hike looking less likely, the dollar has taken a hit this week, sinking well below 117 yen, from above 121 yen at the end of last week when the Bank of Japan said it would adopt a negative interest rate policy.
The euro also rallied, buying more than $1.12, up from levels just above $1.08 last Friday.
The weakened greenback has provided some support to oil prices as it makes the commodity cheaper for buyers using other currencies. With AFP