Stock market rallies; URC rises

The stock market bounced back Tuesday following another rally on Wall Street overnight, with traders welcoming a surprise jump in Chinese factory activity.

The Philippine Stock Exchange Index jumped 190.07 points, or 3.7 percent, to 5,321.23 on a value turnover of P7.4 billion. Gainers beat losers, 132 to 53, with 41 issues unchanged.

Universal Robina Corp., the largest snack food maker, advanced 6.6 percent to P104, while parent JG Summit Holdings Inc. of the Gokongwei Group rallied 5.7 percent to P52.30

Metropolitan Bank & Trust Co., the second-biggest lender in terms of assets, climbed 6.4 percent to P40, while SM Investments Corp. of the Sy Group rose 6.2 percent to P818.

Most Asian equities, meanwhile, enjoyed gains Tuesday while oil bounced, though analysts cautioned that the road ahead remained rocky for the global economy.

The World Bank also warned that fallout from the coronavirus pandemic could bring China’s growth to a standstill, with even a best-case scenario seeing expansion slow to 2.3 percent from 6.1 percent in 2019.

Trillions of dollars pledged to offset the economic impact of the deadly virus have provided a semblance of stability to world markets, which were initially pummeled by the rapid spread of the disease, which has forced swathes of the planet—and the economy—into lockdown.

While the number of infections and deaths continues to rise, observers said traders appear to be getting used to the new normal, with some suggesting the sell-off in stocks may have seen its worst.

“Certainly we are seeing bottoming in the equity market,” Jun Bei Liu of Tribeca Investment Partners told Bloomberg TV. But she added it was “very hard to see equities rally away, on the basis that the infections are still getting worse and the employment numbers continue to track lower.”

After another rally on Wall Street, which saw all three main indexes jump more than three percent, Asia picked up the baton.

Hong Kong, Jakarta and Wellington were all more than one percent higher, Mumbai climbed more than three percent, while Singapore, Seoul and Bangkok were more than two percent better off. Shanghai edged up 0.1 percent.

But Sydney reversed early advances to end down two percent, having soared seven percent Monday on its best day in history. Tokyo finished 0.9 percent lower.

“Stock market price action suggests that investors are comfortable with the ‘whatever it takes, whatever is necessary’ policymakers’ response so far into a deep economic recession,” said AxiCorp’s Stephen Innes.

“At a minimum, the massive monetary and fiscal stimulus gives investors some breathing room with fingers crossed for a health care solution.”

He added that market players were now turning their attention to the implementation of government stimulus measures. 

“This is positive in its own right as it suggests investors are already getting their shopping list ready for the bounce back when government policy tries to raise GDP,” he said. 

Adding to the more positive mood on trading floors was data showing China’s manufacturing sector saw surprise growth in March, having been mauled in February as the country went into lockdown to tackle the virus. With AFP