Stocks rally; Megaworld advances

The stock market jumped Wednesday along with the rest of Asia, after US lawmakers finally agreed on a mammoth stimulus package to support the world’s top economy against the impact of the coronavirus pandemic.

The Philippine Stock Exchange Index climbed 253.49 points, or 5.3 percent, to 5,027.76 on a value turnover of P8.3 billion. Gainers overwhelmed losers, 158 to 44, with 29 issues unchanged.

Megaworld Corp., the biggest lessor of office spaces, advanced 8 percent to P2.15, while JG Summit Holdings Inc. of the Gokongwei Group rose 7.2 percent to P49.

SM Investments Corp. of the Sy Group rallied 7 percent to P800, while Bank of the Philippine Islands, the third-largest lender in terms of assets, climbed 6.5 percent to P55.40.

The rest of Asian equities soared again Wednesday. While the deadly disease continues to spread, traders have a rare semblance of optimism after weeks of carnage across global markets, with eyes fixed on Washington where lawmakers in the early hours thrashed out an emergency bill worth as much as $2 trillion—around 10 percent of US gross domestic product.

“At last, we have a deal,” Senate Majority Leader Mitch McConnell said, citing the massive “wartime level of investment into our nation”.

The prospect of a massive spending splurge, combined with the Federal Reserve’s pledge to essentially print as much cash is needed, sent Wall Street into overdrive Tuesday, with the Dow seeing its biggest rise since 1933, while the S&P 500 enjoyed its best day in more than a decade.

And the gains spread into Asia, which rallied for a second straight day, with extra impetus later in the day coming from the news out of Washington.

Tokyo ended eight percent higher, with investors there were also relieved that the 2020 Olympics had been postponed rather than cancelled.

Hong Kong, Shanghai and Singapore climbed more than two percent, Sydney rallied more than five percent and Seoul piled on more than four percent.

Taipei added almost four percent, while Bangkok and Wellington were also well up.

Adding to the more upbeat mood was the G7’s promise to do “whatever is necessary.”

The unprecedented moves are part of a worldwide response to the rapid financial shock caused by the COVID-19 outbreak, which has locked down countries including the US and brought the global economy to a juddering halt.

“Risk assets are enjoying a nice rebound as the market digests the Fed’s broadening QE move into the corporate space while the prospect of a big US fiscal stimulus edges closer to fruition,” said National Australia Bank’s Rodrigo Catril.

Hopes for the US deal and the Fed’s promise to ramp up its bond-buying also sent the dollar lower, a relief to investors as demand for the unit had seen it soar against peers, including a 35-year high against the pound.

The crude market—which has been hammered by the outbreak’s impact on demand, as well as a price war between Saudi Arabia and Russia—also enjoyed a much-needed lift, though analysts cautioned the commodity still faced uncertainty.

However, observers warned that world markets were not out of the woods just yet as the number of infections and deaths continues to rise rapidly and the full economic impact is still unknown. With AFP

Topics: Stock Market , Philippines Stock Exchange , PSE , Philippines Stock Exchange Index , PSEi , Asian stock market , coronavirus disease 2019 , COVID-19
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