Stocks rose Tuesday, extending recent gains on optimism about the global outlook, though rising Delta coronavirus cases and worries about a slowdown in the economic recovery continue to cast a shadow.
The Philippine Stock Exchange index, the 30-company benchmark gained 35 points, or 0.5 percent, to close at 6,912.71. The broader all-share index rose 20 points, or 0.5 percent, to settle at 4,275.76 on a value turnover of P5.4 billion.
Advancers led gainers, 119 to 76, while 41 issues were unchanged. Eight of the 10 most active stocks ended in the green, led by Monde Nissin Corp. which climbed 5.7 percent to P17.68 and Globe Telecom which went up 3.3 percent to P2,790.
Meanwhile, Tokyo’s Nikkei 225 briefly broke 30,000 for the first time in five months on growing expectations for a fresh injection of stimulus after Japan’s prime minister said he would step aside, paving the way for a new big-spending successor.
The blockbuster growth that characterized the start of the year has tailed off in recent months as the Delta variant sends new infections spiking around the world, tempering consumer spending and forcing some countries to impose strict containment measures.
However, several markets have continued to press to new records or multi-year highs owing to the ultra-loose monetary policies of central banks around the world—particularly the US Federal Reserve—that have kept borrowing costs down.
While there is a general expectation that that largesse will come to an end soon as economies emerge from the pandemic crisis, officials have indicated they are in no rush to taper just yet as they track the impact of Delta.
And Friday’s massive miss on US jobs creation provided a big boost to markets as it meant the Fed’s planned policy tightening will not likely start until November or December, instead of the September that had been suggested.
Trading began the day cautious on Tuesday but most of Asia extended recent gains.
With US traders off Monday for a public holiday, Asia had few catalysts but Shanghai, Sydney, Singapore, Wellington, Manila, Mumbai and Bangkok all posted gains. Seoul, Taipei and Jakarta were the only stragglers.
Hong Kong tourism-linked firms were given an extra lift by news that the city’s government planned to partially open the border with China next week, allowing 2,000 non-residents a day to enter
And Tokyo continued its march higher on stimulus hopes, while a reshuffle of the Nikkei 225 also provided healthy support.
The gauge is up more than four percent since Thursday’s close, before Prime Minister Yoshihide Suga said he would step down and sparked speculation about who would take his mantle.
Data showing a forecast-busting rise in Chinese imports and exports last month eased concerns about slowing growth in the world’s number two economy but OANDA’s Jeffrey Halley added that the readings will likely allow authorities to hold off introducing any fresh support measures.
“China’s data will take the heat of the recessionary fears but may also lessen the likelihood, in investors’ minds, of the need for China to open the stimulus taps,” he said in a commentary.
Still, while the mood is generally upbeat, analysts remain cautious owing to the constant threat of the pandemic.
“The Delta – and possibly other—variant(s) remain a cause for concern as the disease is spreading rapidly through unvaccinated communities and the efficacy of the 2021 vintage of vaccines is being questioned,” Chris Iggo, at AXA Investment Managers, noted.
“I don’t think the recovery and growth outlook is negated by this but there could be some ‘air-pockets’ in the data and in investor sentiment.”
London, Frankfurt and Paris dipped at the open. With AFP