July 22, 2021 at 08:25 pm
Manila Standard Business
Stocks rallied Thursday along with the rest of Asia on bargain hunting to snap a four-day losing streak, as worries about the Delta variant were overshadowed by more strong earnings reports indicating companies were faring well as the global economy emerges from last year’s pandemic-induced collapse.
The Philippine Stock Exchange Index jumped 100.41 points, or 1.6 percent, to 6,576.62 on a value turnover of P3.7 billion. Gainers routed losers, 136 to 56, with 52 issues unchanged.
BDO Unibank Inc. of the Sy Group, the biggest lender in terms of assets, advanced 3.4 percent to P107.60, while Bank of the Philippine Islands, the third largest bank, climbed 3.8 percent to P87.50.
JG Summit Holdings Inc. of the Gokongwei Group, rose 3.8 percent to P60.40, while AC Energy Corp., a unit of conglomerate Ayala Corp., increased 2.8 percent to P8.22.
The rest of Asian markets rose. After a painful start to the week, investors were back in the saddle as Wall Street and Europe enjoyed back-to-back rallies thanks to optimism about the outlook, and despite surging infections that have forced some governments to reimpose lockdowns or other containment measures.
Confidence in the long-term recovery has been fortified by data showing that while fully vaccinated people have been infected with the new strain of COVID—such as in the United States and Britain—hospitalization and death rates among them have remained relatively low, suggesting the drugs are working.
“The base case in the US is that the rise in Delta infections will not see restrictions tightened and although vaccination rates differ by state, 79.5 percent of the over-65s population is now fully vaccinated,” said National Australia Bank’s Tapas Strickland.
He added that while Delta concerns remained, “the consensus is that it does not pose an immediate risk to the recovery. At most, given effective vaccines, Delta pushes out the recovery by a quarter as countries seek to vaccinate a higher share of their respective populations before fully repealing virus restrictions.”
All three main indexes in New York enjoyed healthy gains.
And Asia extended the rally, with Hong Kong leading the way by climbing 1.8 percent, while Sydney, Singapore, Seoul, Mumbai and Jakarta also put on more than one percent. There were also gains in Shanghai, Wellington and Bangkok. Tokyo was closed for a holiday.
US traders cheered after forecast-beating earnings from Verizon and Coca-Cola, while United Airlines predicted profits down the line despite Covid curtailing travel.
Observers said about 85 percent of US firms that have reported so far have beaten expectations.
“Earnings estimates are quite remarkable, probably some of the best on record,” David Mazza, at Direxion, told Bloomberg Television. “Even through all this, we have central bank liquidity remaining very abundant, economic growth being robust.
“Certainly there are some question marks around how long that can continue, but for the time being momentum is at investors’ back.”
However, analysts warned the earnings reports had also shown that inflation remained an issue, with some saying price pressures were higher and longer-lasting than foreseen.