The stock market virtually closed flat Monday, with many investors staying in the sidelines and monitoring the battle for the speakership post in the Lower House that could influence the passage of the proposed 2021 budget.
The Philippine Stock Exchange Index rose just 5.44 points, or 0.09 percent, to 5,937.05 on a value turnover of P5.3 billion. Gainers beat losers, 105 to 96, with 42 issues unchanged.
AC Energy Philippines Inc., a unit of conglomerate Ayala Corp., advanced 8.4 percent to P3.37, while Nickel Asia Corp., the biggest nickel miner, climbed 5.1 percent to P3.69.
International Container Terminal Services Inc. of tycoon Enrique Razon Jr., the largest port operator, gained 3.8 percent at P120, but Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, hospitals and infrastructure, fell 4.2 percent to P3.87.
Meanwhile, optimism that US lawmakers will eventually pass a new stimulus package lifted Asian markets Monday, with the White House ramping up its offer and Donald Trump insisting Republicans want to get a deal done.
The gains followed another strong lead from Wall Street, with hopes for a fresh injection of cash into the world’s top economy overshadowing a surge in virus infections that have forced some governments to reimpose containment measures and targeted lockdowns.
Hong Kong and Shanghai led Asian markets higher, both piling on more than two percent with support also coming from hopes Xi Jinping will use a speech in Shenzhen later this week to announce a further opening of China’s economy.
“Investors are optimistic on further reforms and upgrades for Shenzhen, which are expected to drive foreign capital inflows and enhance the tech sector,” Patrick Shum at Tengard Holdings Ltd. said.
Sydney, Seoul, Singapore, Jakarta and Wellington also enjoyed healthy gains, though Tokyo ended down.
Investors were sent on a roller-coaster ride last week when President Trump called off talks before doing a volte-face to say they were back on and saying they were progressing well.
On Friday, he jacked up his offer, proposing a $1.8-trillion package and even saying he favored an even larger package.
The move has instilled optimism that an agreement can be reached, even though the White House plan is $400 billion short of the one put forward by the Democrats.
With Joe Biden well ahead in opinion polls, analysts say traders are increasingly betting he will win next month’s election comfortably—avoiding the uncertainty of a Trump challenge to the result—and Democrats will take both houses of Congress.
That expectation continues to support equities, even while the talks remain jammed up with Senate Majority Leader Mitch McConnell saying there was not enough time to complete the talks before the vote, while Democrat House Leader Nancy Pelosi said they were at an impasse.
“Markets that once feared a Democratic sweep now appear to be hoping that the Democrats do take control of the Senate, with the polling leads for Biden boosting optimism for greater stimulus,” said Ben Emons, a strategist at Medley Global Advisors. With AFP