Stocks rebounded Friday from a seven-day slump, after China’s inflation beat expectations, boosting optimism about the strength of the world’s second-largest economy.
The Philippine Stock Exchange index, the 30-company benchmark, advanced 77 points, or 1.1 percent, to close at 7,389.30 Friday. This pushed up total gains this year to 6.3 percent.
The heavier index, representing all shares, also rose 33 points, or 0.8 percent, to settle at 4,40269, on a value turnover of P7.4 billion. Advancers outnumbered losers 132 to 54, while 40 issues were unchanged.
All six sectors climbed, while 16 of the 20 most active stocks ended in the green, led by LT Group Inc., the holding company of tycoon Lucio Tan, which climbed 6.4 percent to P15.06. Security Bank Corp. rose 4.3 percent to P215.80, while Semirara Mining and Power Corp. gained 3.5 percent to P122.70.
Meanwhile, most Asian stock markets also traded higher Friday, on news Chinese factory gate prices rose for the first time in more than four years, while Thai stocks rallied on news of King Bhumibol Adulyadej’s death and expectations of a smooth transition, with analysts saying a sell-off this week was overdone.
Beijing said the producer price index increased last month after 54 consecutive months of falling, beating estimates for a drop and providing some much-needed hope for the Chinese economy a day after market-sapping trade figures.
Chinese firms have for years been battered by falling prices for their goods in the face of chronic overcapacity and weak demand, putting a damper on growth in a key driver of the world economy.
Consumer prices also rose more than expected.
“The end of PPI deflation is a good signal for the economy’s stabilization,” Gao Yuwei, a researcher at Bank of China in Beijing, told Bloomberg News. “PPI is expected to be remain expansionary in the coming months.”
Traders around Asia broadly welcomed the news on the world’s number two economy and key driver of global expansion, which is struggling with a years-long fight against slowing growth.
Hong Kong added 0.6 percent by lunch and Sydney—where several firms with close ties to China are listed—gained 0.1 percent, while Seoul was up 0.6 percent. Tokyo added 0.2 percent.
However, Shanghai eased 0.5 percent on worries the data will give the Chinese central bank reason to hold off any stimulus measures.
In Bangkok, the Stock Exchange of Thailand soared 3.7 percent at the open, paring huge losses built up through the week as news filtered out that the king was gravely ill. The baht climbed more than one percent against the dollar.
Thai stocks plunged around percent this week and the baht lost around three percent as investors grew uneasy about political and economic stability following the death of the monarch who reigned for seven decades.
While he wielded no official power, Bhumibol was considered a uniting force in a fractured nation where political tensions are still raw two years after a military coup.
However, analysts said the king’s death had been priced into the market and investors were now rushing in for bargain stocks, while attention will now be on the succession process for his son.
“Thailand’s economic fundamentals remain unaffected, which should help it to weather this storm,” Jingyi Pan, a Singapore-based strategist at IG Asia Pte, said before the announcement. With AFP, Bloomberg
