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Market jumps on bargain-hunting

The stock market surged Monday on bargain-hunting along with the rest of Asia, as investors cheered data showing a surprise jump in Chinese factory activity.

The Philippine Stock Exchange Index jumped 138.23 points, or 1.8 percent, to 7,877.19 on a value turnover of P5.3 billion. Losers, however, beat gainers, 104 to 86, with 49 issues unchanged.

Conglomerate Ayala Corp. advanced 4.3 percent to P841, while Jollibee Foods Corp., the biggest fast-food chain, rose 3.1 percent to P197.90.

BDO Unibank Inc., the largest lender in terms of assets, climbed 4.1 percent to P158, while sister unit and integrated property developer SM Prime Holdings Inc. added 2.6 percent to P40.

The rest of Asian markets rose Monday, while oil prices bounced from last week’s sharp losses after Iraq said top producers could announce a cut in output this week.

But while the week started on a positive note, worries about the trade talks were revived by China’s Global Times newspaper saying Beijing wanted all US tariffs rolled back as part of a mini deal, a move observers said Washington is unlikely to agree to.

China said on Saturday that its manufacturing sector expanded in November for the first time in seven months, providing a much-needed boost to investors looking for signs of optimism in the world’s number-two economy. Another survey Monday of smaller firms also showed a better-than-expected pick-up in factory activity.

The news comes as Beijing and Washington put the final touches to a partial trade deal, the expected passage of which has helped global markets rally for weeks.

“This improvement in the manufacturing (purchasing managers index) is important because we can say with more certainty than at the beginning of the year that China’s macro outlook is indeed stabilizing,” Aninda Mitra, senior sovereign analyst at BNY Mellon Investment Management, told Bloomberg News.

“A phase one-related pause, which seems to be around the corner, could herald the end of further, scheduled tariff hikes and the rollback of those imposed in September.”

In afternoon trade, Hong Kong rose 0.4 percent and Shanghai edged up 0.1 percent, while Sydney and Seoul each finished 0.2 percent stronger.

Tokyo ended up one percent at a 14-month high, Taipei and Mumbai added 0.1 percent and Jakarta also rose. But Singapore, Wellington and Bangkok fell.

“Recent manufacturing PMI data does appear to be showing signs of an improvement, not only in the US, but across the rest of the world,” said Michael Hewson at CMC Markets UK.

“This would appear to be a welcome respite to what has been an awful year for the manufacturing sector, which has to all intents and purposes been in recession for most, if not all, of this year.”

However, analysts raised concerns about an article in the Communist Party-linked Global Times, which tweeted that the government wants levies imposed on China to be removed as the US talks continue. It also said leaders wanted tariffs lined up for December 15 to be taken off the table. With AFP

Topics: stock market , Philippine Stock Exchange Index , Ayala Corp. , Jollibee Foods Corp.
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