Philippine shares rallied strongly on Tuesday, surging past the 6,500 level, buoyed by upbeat global cues and peaceful mid-term elections at home.
The Philippine Stock Exchange index (PSEi) closed at 6,566.82, up 108.6 points or 1.68 percent. The wider all shares index ended at 3,805.33, higher by 42.48 points or 1.13 percent.
“The PSE benchmark index surged above the key resistance around 6,500 on strong volume as investors bought into positive news of a 90-day detente in the US-China trade war as well as the generally peaceful outcome of the Philippine midterm elections,” said China Bank Capital managing director Juan Paolo Colet.
“This is a good start to the shortened trading week, but sustaining this will now depend on the market’s reaction to upcoming data flows, including first quarter corporate earnings and the US April inflation print,” Colet said.
Mining and oil index was the lone sectoral index that closed in negative territory, declining by 1.34 percent on falling gold prices.
Service index advanced by 2.47 percent followed by holding firms which rose 1.96 percent.
Value turnover reached P7.69 billion.
Shares of International Container Terminal Service Inc surged 5.71 percent to close at P407 per share amid easing concerns on trade war.
On the other hand, shares of Ayala Land Inc dipped by 1.53 percent to P22.50 apiece.
Most Asian stocks extended gains Tuesday as investors basked in the glow of the China-US tariff suspension that has fueled hopes the world’s two economic superpowers will step back from a punishing trade war.
Equity markets across the world rallied with oil and the dollar Monday after the two sides said they would slash most of their eye-watering tit-for-tat levies and hold talks to end a standoff that has stoked recession fears.
The news raised hopes that deals can be done with Washington to cut or even remove some of the tolls unveiled by Donald Trump on his “Liberation Day” on April 2 that sent shivers through trading floors and raised concerns about the global trading system.
Top-level negotiators said after two days of talks in Geneva at the weekend that the United States would reduce its 145 percent duties on China to 30 percent for 90 days, while Beijing would cut its retaliatory measures to 10 percent from 125 percent.
The US president described the move as a “total reset” and said talks with counterpart Xi Jinping could soon follow, while US Treasury Secretary Scott Bessent told CNBC he expected officials would meet again in the coming weeks to reach “a more fulsome agreement.”
After piling higher on the news Monday, most of Asia’s markets started Tuesday on the front foot.
Tokyo was up more than one percent, while Shanghai, Sydney, Taipei, Singapore, Seoul, Wellington, Bangkok and Manila were also well up.
London, Paris and Frankfurt edged up in early trade.
However, Hong Kong dropped nearly two percent, having surged three percent the day before. Mumbai also slipped.
The dollar also pulled back from the previous day’s rally, though oil reversed early losses to extend Monday’s advance.
The broad gains in Asia came after Wall Street greeted the announcement with open arms.
The tech-heavy Nasdaq rocketed more than four percent, the S&P 500 jumped 3.3 percent and the Dow 2.8 percent, while a gauge of US-listed Chinese stocks surged more than five percent.
“Clearly, US-China trade talks have yielded much faster success than many had expected,” strategists at HSBC wrote in a note.
“There’s very clearly upside risk for the broader risk asset spectrum now as markets will likely extrapolate a higher likelihood of further deals in the coming weeks.”
However, nervousness remains.
The HSBC strategists added: “These may not move in a straight line. Things could easily turn out a bit bumpier in future trade negotiations.”
IG chief market analyst Chris Beauchamp said the talks show “both sides are aware of the need to repair their relationship, and avoid further damage from the imposition of such huge tariffs.”
“But even at the pause levels of 10 percent and 30 percent, these tariffs are still much higher than anything imagined by investors just a few months ago.
“It is not quite six weeks since these tariffs were introduced — the impact has yet to really appear in both economic data and company earnings. The full impact will only become clear with time.”
Federal Reserve governor Adriana Kugler warned that even with the reduction in tariffs, Trump’s trade policies will likely push inflation higher and weigh on economic growth. With AFP
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