The stock market rose Thursday as traders looked past data showing the Philippine economy contracted 16.5 percent in the second quarter, the worst quarter on record dating back to 1981 and putting it into recession.
The Philippines Stock Exchange Index advanced 69 points, or 1.2 percent, to 5,902.58 on a value turnover of P6.5 billion. Losers, however, edged gainers, 90 to 88, with 46 issues unchanged.
Observers said there was an expectation that the economy had suffered the worst and would begin picking up in the second half of the year.
Puregold Price Club Inc. of retail tycoon Lucio Co climbed 4.2 percent to P50, while Jollibee Foods Corp., the biggest fast-food chain, increased 3 percent to P135.
Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, hospitals and infrastructure, gained 2.9 percent at P3.20, while Universal Robina Corp., the largest snack food maker, rose 2.2 percent to P134.40.
Asian markets mostly rose Thursday building on a two-day rally, with nervous investors keeping an eye on stimulus talks in Washington, while China-US tensions continued to weigh on confidence.
And while there were hopes over the development of a coronavirus vaccine, the rapid spread of the contagion around the world and fresh flare-ups that have caused renewed lockdowns were keeping a lid on buying sentiment and sending safe-haven gold soaring to record highs.
Seoul, Singapore, Mumbai and Jakarta climbed more than one percent, while Shanghai gained 0.3 percent and Sydney put on 0.7 percent.
Taipei, Bangkok and Wellington were also up.
However, Hong Kong slipped more than one percent and Tokyo ended down 0.4 percent.
All three main indexes on Wall Street ended with gains Wednesday”•the Nasdaq at another record”•on bets US lawmakers will eventually reach a deal on another much-needed stimulus for the world’s top economy.
The two parties remain far apart on their proposals with Democrats’ $3.5 trillion plan more than three times bigger than the Republicans’ offer with a key sticking point the supplementary jobless benefits, which ran out last week.
“I feel optimistic that there is light at the end of the tunnel,” Democratic House Leader Nancy Pelosi told reporters. “But how long the tunnel is remains to be seen.”
Still, there is agreement that they will eventually have to compromise at some point and Republican Senate Majority Leader Mitch McConnell said next week’s recess could be put off so a deal can be reached.
Analysts said there are broad expectations that upcoming elections will push Congress to eventually reach a deal, while Donald Trump has raised the prospect of using an executive order to push through tax cuts and a ban on evictions.
“For now our sense is that no politician in the US wants to be blamed for a failure to deliver a new round of stimulus ahead of the elections in November,” said National Australia Bank’s Rodrigo Catril.
“US Treasury Secretary (Steve) Mnuchin remarked that while differences remain, at least there was an agreement to set a timeline. So the story continues to be about when the deal will be agreed, rather than if.” With AFP
