Philippine stocks closed this week’s trading in the green, closing slightly below the 6,800 level on the back of the recent peso appreciation against the US dollar.
The Philippine Stock Exchange index, the country’s main composite index, surged 86.68 points, or 1.29 percent, to close at 6,791.69, while the broader all shares index rose 24.97, points or 0.69 percent, to finish at 3,627.83.
Regina Capital Development Corp. head of sales Luis Limlingan said market sentiment was driven by stronger peso and optimistic economic prospects. The peso closed at 58.33 against the greenback Friday.
“The Asian Development Bank’s forecast of strong economic growth for the Philippines and Vietnam in 2024 and 2025 further boosted investor confidence,” Limlingan said.
Foreign buying, which reached P1.44 billion, also helped the market close strongly. Value turnover improved to P5.86 billion with 96 advancers, 75 decliners and 65 stocks unchanged.
Among the sub-indices, only the mining and oil ended in the red, declining by 1.2 percent. Financial jumped 2.53 percent, followed by property which rose by 1.4 percent and services by 0.96 percent.
Meanwhile, Asian equities sank Friday as hopes for US interest rate cuts were offset by uncertainty over the US presidential election and worries about China’s economy, while technical disruptions delayed London’s open as a widespread outage hit global computer systems.
Investors were already on edge after a report said the White House was considering a crackdown on firms supplying chip technology to Beijing, and following Donald Trump’s call for Taiwan to pay Washington for help defending itself against China.
Markets have been enjoying a healthy run-up as Federal Reserve officials have lined up in recent days to suggest they are ready to begin reducing rates.
Data Thursday provided fresh room for the central bank to act, with initial jobless claims rising more than expected last week.
However, the tech sector — which has led the surge in stocks this year — has taken a hefty hit after the report of the warning from the White House over supplying China and Trump’s remarks about Taiwan, home to some of the world’s biggest chip producers.
There is also growing uncertainty over who will run against Trump in November, as calls for President Joe Biden to step aside continue to grow following a series of gaffes and a poor debate that have raised questions about his health.
The New York Times cited several people close to Biden as saying they believe he has begun to accept that he may not be able to win and may have to drop out, with one quoted as saying: “Reality is setting in.”
Former president Barack Obama has reportedly told allies Biden should “seriously consider the viability of his candidacy”, The Washington Post said.
While a Trump win is seen as positive for equities owing to likely tax cuts and corporate deregulation, there are worries about his plans to impose huge tariffs on Chinese imports — and those from elsewhere — which many say could fuel inflation again.
A closely watched meeting of China’s leaders in Beijing this week provided nothing concrete by way of supporting the world’s number two economy.
The Third Plenum, which meets twice a decade to decide key policies, saw few policy announcements, with state news agency Xinhua saying they had agreed to “prevent and resolve risks in key areas such as real estate, (and) local government debt”.
They also vowed to “actively expand domestic demand” days after data this week revealed retail sales — a gauge of consumption — rose far less than expected in June.
Economists at HSBC said: “The communique’s emphasis on ‘opening up as a distinctive feature of China’s modernization’ is worth noting. We expect the government to prioritize reforms that will facilitate foreign investment.
They pointed to persistent cross-border outflows, which are weighing on the yuan, and noted that the currency would likely remain under pressure owing to the big difference in US and Chinese interest rates, which makes it harder to attract investors.
“With the (yuan’s) yield disadvantage likely to stay wide for longer, China needs more opening-up and market-oriented policies to attract or retain foreign investment.
“This may help reduce imbalance in cross-border flows, and thus alleviate (yuan) depreciation pressure.”
Shares in Hong Kong fell owing to a lack of policy detail, though Shanghai eked out a gain. There were also losses in Tokyo, Sydney, Seoul, Singapore, Mumbai, Bangkok, Taipei, Wellington and Jakarta.
Paris and Frankfurt fell while London’s FTSE 100 retreated after opening late having been hit by technical issues, with services around the world including airports, rail operators, banks, media and shops also affected.
The disruption caused major US airlines to ground all flights over “communication issue”, the Federal Aviation Authority said.
Tech titan Microsoft said it was taking “mitigation actions” in response to service issues.
It was not clear if those were linked to the global outages.
The announcement came as Australia reported a large-scale outage of IT systems, with the country’s national broadcaster, its largest international airport and a major telecommunications company reporting issues. With AFP
