Stocks rally; ICTSI, Ayala Land up

The stock market rallied Wednesday as hopes the deadly new coronavirus will have only a short-term impact on corporate earnings and economic growth prevailed.

The Philippine Stock Exchange Index advanced 74.05 points, or 1 percent, to 7,396.94 on a value turnover of P6.5 billion. Gainers beat losers, 101 to 91, with 48 issues unchanged.

International Container Terminal Services Inc., the biggest port operator, climbed 3.8 percent to P142.20, while major property developer Ayala Land Inc. rose 2.7 percent to P42.20.

Universal Robina Corp., the largest snack food maker, increased 2.6 percent to P153, while SM Investments Corp. of the Sy Group also added 2.6 percent to P1,038.

The rest of Asian markets rebounded Wednesday.

Falls on US and European markets—after Apple’s warning that it would miss its quarterly revenue forecast due to the epidemic—did not carry over to Asia as investors bet on policymakers doing what is needed to minimize the fallout.

The illness, which has killed more than 2,000 people and infected over 74,000, has disrupted supply chains and forced the cancellation of high-profile sporting and cultural events.  

As stimulus measures are rolled out in China and elsewhere, “Asia seems confident that the region’s governments will ‘do what it takes’ to offset the coronavirus slowdown,” Jeffrey Halley, senior market analyst for Asia at OANDA, said in a commentary.

After four straight sessions in the red, Tokyo’s benchmark Nikkei 225 index closed up 0.9 percent.  

Hong Kong was up 0.4 percent but mainland China’s key Shanghai Composite Index was off 0.1 percent.

Elsewhere, South Korea was flat as the number of confirmed cases of the virus jumped by nearly half.  

Taipei gained 0.9 percent and Sydney put on 0.4 percent.

The more sanguine mood came as Chinese officials released a study showing most patients have mild cases of the coronavirus, and World Health Organization officials said the mortality rate was relatively low.

IMF chief Kristalina Georgieva has said there could be a cut of around 0.1-0.2 percentage points to global growth but stressed there was much uncertainty about the virus’s economic impact.

Anne Anderson of UBS Asset Management in Sydney played down concerns.

“It’s important to contextualize the impact of the virus—we’re not expecting a permanent cut in global growth,” Anderson told Bloomberg TV.  

“The combination of the fiscal-monetary and the belief that we will transition through this over the coming months mean we’re still on steady footing.”  

Apple’s announcement that it would miss its March quarter revenue forecast while global iPhone supplies would fall jolted markets and sparked renewed demand for safe-haven assets such as gold.  

Not everyone is convinced the economic impact will be fleeting, however, suggesting Wednesday’s gains could be temporary.

“The debate on whether (COVID-19) is a transient economic shock or worryingly a more longer-lasting global economic headwind appears to be shifting in favor of the latter following Apple’s admission,” said Rodrigo Catril of National Australia Bank. With AFP