Stocks extend rally; LT Group, Meralco rise

Stocks rose Thursday for the fourth straight day on improving economic prospects after the Department of Tourism allowed hotels to operate at full capacity in areas declared under modified community quarantine and general community quarantine.

The Philippine Stock Exchange Index surged 66.04 points, or 1 percent, to 6,344.63 on a value turnover of P9.8 billion. Losers, however, beat gainers, 112 to 100, with 43 issues unchanged.

LT Group Inc. of tobacco and airline tycoon Lucio Tan advanced 7 percent to P11.96, while Nickel Asia Corp., the biggest nickel miner, climbed 5.4 percent to P3.92.

Manila Electric Co., the largest retailer of electricity, was up 3.5 percent to P295, while SM Prime Holdings Inc. of the Sy Group added 3.2 percent to P33.50.

Meanwhile, Asian markets mostly fell Thursday as chances of a pre-election stimulus package from Washington dimmed, while investors were also spooked by warnings from US officials that Russia and Iran had tried to interfere in the vote.

Wall Street’s three main indexes ended lower, and Asia followed.

Tokyo dropped 0.7 percent, Sydney and Mumbai each fell 0.3 percent, and Shanghai shed 0.4 percent. Seoul, Singapore, Jakarta and Wellington were also well in the red.

However, Hong Kong, Taipei and Bangkok posted gains.

With the presidential vote less than two weeks away, investors are stepping back from putting any new bets on a deal despite recent optimism and Donald Trump’s call for the two sides to hammer out a massive rescue package.

The deadlock comes as the need for help for struggling Americans is laid bare by a surge in new cases across the US that observers fear could hammer the world’s top economy.

The White House has said it will agree to a $1.9 trillion bill but that is $300 billion short of what Democrats have put forward—and even more than many congressional Republicans are willing to swallow.

Still, the two sides continue to talk.

“I don’t think our chances get better after the election. I do think the next 24 to 48 hours will tell us a whole lot,” White House chief of staff Mark Meadows said on Fox News.

Democratic House Speaker Nancy Pelosi spoke again late Wednesday with Treasury Secretary Steven Mnuchin, and the session “brings us closer to being able to put pen to paper to write legislation,” Pelosi spokesman Drew Hammill said on Twitter.

But analysts do not expect anything to happen any time soon.

“We don’t see a stimulus package passed before the election,” Wells Fargo Securities LLC strategist Anna Han told Bloomberg TV.

“We still think the recovery will proceed and in three to six months you’re going to see that sequentially improving narrative and that’s going to help earnings growth going forward.”

While expectations of a stimulus deal are evaporating, traders remain broadly upbeat in the medium term as polls suggest Joe Biden and the Democrats could sweep the presidency and both houses of Congress on November 3, which many feel could lead to an even bigger package. With AFP