The stock market rallied Friday, with banks again leading gainers after the Bangko Sentral ng Pilipinas raised interest rates by another 25 basis points to curb inflationary pressures.
The Philippine Stock Exchange Index jumped 130.75 points, or 1.9 percent, to 7,083.34 on a value turnover of P9.9 billion.
Investors have welcomed the interest rate hike and government’s resolve to address rising prices. The rate increase also provides banks with potential higher interest margins.
Bangko Sentral Deputy Governor Almasara Cyd Tuano-Amador said the upside risks to inflation outlook remained amid the measures implemented by the government to make sure consumer prices were in check.
Bank of the Philippine Islands, the third-biggest lender in terms of assets, advanced 5.2 percent P88.90, while BDO Unibank, the largest bank, climbed 5.1 percent to P124.
GT Capital Holdings Inc. of tycoon George Ty surged 12.1 percent to P807, while Alliance Global Group Inc. of Andrew Tan rose 4.1 percent to P10.70.
The rest of Asian markets swung throughout Friday as investors weighed China-US trade speculation, while the pound struggled to stage a strong recovery from the previous day’s Brexit-fuelled bruising.
Hong Kong edged down 0.1 percent in the afternoon while Shanghai closed 0.4 percent up. Tokyo was off 0.6 percent.
Sydney eased 0.1 percent, Singapore added 0.9 percent and Seoul rose 0.2 percent. Jakarta and Mumbai were also up but Taipei and Wellington slipped.
As a volatile week drew to a close, some stability emerged in the oil sector with earlier sharp losses tailing off, providing relief to regional energy firms.
Hopes that the world’s top two economies are making efforts to resolve their painful tariffs standoff provided support to global markets, though conflicting reports were keeping any optimism in check.
On Thursday it was reported that China had handed the US a number of trade concessions as part of a move to smooth relations ahead of a G20 summit where Donald Trump is expected to meet Chinese President Xi Jinping.
The Financial Times also said the two sides were stepping up efforts and that US Trade Representative Robert Lighthizer had told business leaders the next round of tariffs would be put on hold. While Lighthizer’s office denied that, observers said the news still provided some hope.
“Maybe if we can get progress in trade relations, that could be a boost,” Jason Browne, chief investment strategist at FundX Investment Group, told Bloomberg News.
However, he added that “the benefits are likely to get offset from expectations of continued (interest rate) hikes from the Fed.”
And Stephen Innes, head of Asia-Pacific trade at OANDA, said it appeared the two sides were “looking to kick the can down the road until February to resolve some significant differences.”
But he warned “the fear here is that this long and winding road to compromise could be dotted with numerous pratfalls.” With AFP
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