Philippine stocks surged past the 6,500 level Monday, leading to a possible Santa Claus rally.
The Philippine Stock Exchange index jumped 128.53 points, or 2.01 percent, to close at 6,534.91, while the broader all-shares index advanced by 51.40 points, or 1.40 percent, to settle at 3,727.23.
“Philippine shares finally bounced back closing at 6534.91, up by 2.01 percent as investors prepare for the last trading week of the year,” Regina Capital Development Corp. head of sales Luis Limlingan said.
The recent rebound in the local currency against the dollar also boosted market sentiment. The peso closed at 58.45 against the US dollar Monday, up from 58.81 Friday.
For the remainder of the week, investors are waiting for the release of key US economic data including the consumer confidence report and the durable goods orders report.
On the local front, it will be a relatively quiet and shortened trading week, with the November budget balance set for release on Dec. 27.
The Philippine equities market will be closed Dec. 24 and 25 in observance of Christmas Eve and Christmas Day, respectively.
Value turnover reached P3.992 billion, with 110 advancers vs. 72 decliners and 53 unchanged issues.
Foreign investors were net buyers, with net inflows amounting to P255.8 million.
All sectors ended in the green, led by industrials which climbed 2.97 percent, followed by property which increased 2.31 percent.
Manila Electric Co, led the index members, jumping 7.52 percent to P486, while Century Pacific Food Inc. was the top decliner, dropping 1.55 percent to P41.35.
Meanwhile, Asian markets rose Monday after big gains on Wall Street, with traders welcoming below-forecast US inflation data that tempered worries that the Federal Reserve will take a more hawkish tone with interest rates next year.
A holiday-thinned week got off to a healthy start after last week’s sell-off sparked by the US central bank’s outlook that suggested officials will not lower borrowing costs as much as previously hoped over the next 12 months.
Sharp losses in reaction to the forecasts were pared after data showed the personal consumption expenditures (PCE) index, the Fed’s preferred gauge of inflation, came in at 2.4 percent on-year in November.
While the reading was up slightly from October, it was lower than expected, providing some optimism that policymakers were winning the battle against prices and would have room to keep cutting rates.
The figures led to a pullback in US Treasury bond yields that had jumped last week to their highest levels since May, helped by comments from Chicago Fed chief Austan Goolsbee, who expressed confidence that inflation was returning to the bank’s two percent target.
Still, there remains some trepidation among investors as Donald Trump prepares to return to the White House, pledging to cut taxes, slash regulations and impose tariffs on imports, which some economists warn could reignite inflation.
Ronald Temple, chief market strategist at Lazard, said in a commentary: “The initial response to the US election was positive as investors focused on the obvious tailwinds to profitability: lower corporate tax rates and less regulation.
“However, I expect much more dispersion within the equity market when the reality of a much-less-friendly trade environment sets in.”
All three main indexes in New York ended more than one percent higher.
Asia followed suit, with Tokyo, Hong Kong, Sydney, Singapore, Seoul, Taipei, Mumbai, Bangkok and Manila all in the green. Shanghai was the sole decliner.
London, Frankfurt and Paris were all lower in early European trade.
The dollar also held losses suffered in the wake of the PCE data, with the yen, pound and euro all stronger than Thursday.
Investors were also cheered by news that US lawmakers had reached a deal to avert a Christmastime government shutdown following marathon talks on Friday.
The last-minute scramble came after Trump and billionaire Elon Musk pressured Republicans to abandon an earlier bipartisan funding compromise.
Lawmakers then spent several days trying to hammer out another deal, with massive halts to government services hanging in the balance.
Non-essential operations would have ground to a halt if no deal had been struck, with up to 875,000 workers furloughed and 1.4 million more required to work without pay.
“This agreement represents a compromise, which means neither side got everything it wanted,” President Joe Biden said on signing the bill on Saturday.
“But it rejects the accelerated pathway to a tax cut for billionaires that Republicans sought.” With AFP
