Stocks surge; JG Summit climbs

The stock market bounced back Wednesday following gains in Wall Street overnight and the sharp drop in oil prices in the world market.

The Philippine Stock Exchange Index surged 159.22 points, or 2.2 percent, to 7,579.62 on a value turnover of nearly P6 billion. Gainers overwhelmed losers, 124 to 60, with 50 issues unchanged.

JG Summit Holdings Inc. of industrialist John Gokongwei advanced 6.7 percent to P54.40, while Aboitiz Equity Ventures Inc. climbed 5.5 percent to P54.50.

BDO Unibank Inc., the biggest lender in terms of assets, gained 4 percent to P130.50, while parent SM Investments Corp. rose 3.3 percent to P950.

Most markets, meanwhjile, were mixed in Asia Wednesday as investors moved cautiously after the previous day’s sell-off, while focus is on a Federal Reserve policy decision with opinions split on whether or not it should hike interest rates again.

Oil prices also edged up but were struggling to make a dent in the steep losses sustained Tuesday as traders fret over a global supply glut, higher production and the outlook for demand.

Uncertainty stalked Asian trading floors Wednesday. Hong Kong ended up 0.2 percent but Shanghai was down 1.1 percent.

Tokyo lost 0.6 percent, with shares in the mobile unit of telecom titan SoftBank plunging 14.5 percent on their debut despite a record-breaking IPO that raised more than $23 billion.

Sydney slipped 0.2 percent but Singapore gained 0.6 percent, Seoul jumped 0.8 percent and Wellington was 0.9 percent higher.

Taipei added 0.7 percent and Mumbai and Bangkok each put on 0.5 percent.

With the US economy still healthy, the Fed’s board has been steadily lifting borrowing costs for the past couple of years as it treads a fine line between maintaining growth and keeping inflation in check.

However, its last meeting of 2018 has taken on major significance as the sell-off in equities this year, signs of slowing across the planet—including the US—and a series of other negative factors including the China trade row put pressure on the bank to pause.

Donald Trump has spent most of the year lambasting the Fed for its policy of monetary tightening and has called on it “not to make yet another mistake” Wednesday.

And while the bank has ignored the president’s calls—and is tipped to hike again before slowing the pace next year—a number of economists and commentators are also now suggesting a break could be in order.

“While US economic signals are not flashing red, to keep the US economic momentum heading in the right direction many market participants believe the Fed should provide investors with some breathing room (as) higher interest rates coupled with tighter liquidity conditions have sent equity markets on a downward spiral since October,” said Stephen Innes, head of Asia-Pacific trade at OANDA.

But Tai Hui, chief market strategist for Asia-Pacific at JP Morgan Asset Management, warned that such a move could have bad consequences. With AFP

Topics: Stock Market , Philippine Stock Exchange , PSE , Philippine Stock Exchange Index , PSEi , JG Summit
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