Stocks rebounded Tuesday, as the selloff in riskier assets eased and as the dollar steadied after Wall Street staged a recovery.
The Philippine Stock Exchange index, the 30-company benchmark, rose 85 points, or 1.2 percent, to close at 7,331.46, as five of the six major sectors advanced, with only mining and oil registering losses.
The heavier index, representing all shares, also climbed 41 points, or 0.9 percent, to settle at 4,411.21, on a value turnover of P6.6 billion. Advancers outnumbered losers, 100 to 80, while 48 issues were unchanged.
Seventeen of the 20 most active stocks ended in the green, led by casino operator Melco Crown (Philippines) Resorts Corp. which gained 5.2 percent to P6.44 and conglomerate LT Group Inc. which went up 4.9 percent to P16.40. SM Investments Corp. rose 3.3 percent to P680.50.
Meanwhile, Asian markets mostly bounced Tuesday from the previous day’s hefty sell-off, with hopes Donald Trump can push through his economy-boosting agenda despite last week’s healthcare debacle.
However, with expectations about the rate of future US interest rate hikes receding the dollar is struggling to break back against its major peers.
Markets across the world tumbled after the tycoon’s repeal of Obamacare fell at the first hurdle Friday as he failed to garner enough votes from his own Republican party, who control both houses of Congress.
The failure fueled worries Trump would not be able to drive his much-vaunted tax-cutting, infrastructure spending, deregulation plans with analysts pointing out it will leave the administration with less cash to pay for such measures. Hopes for his plan helped fuel a surge in global markets and the dollar since the November election.
While New York and European markets ended on a low, they were well off their early losses and provided Asian traders with something to play with as the dust settles after Trump’s bruising defeat.
“What seems to be going on in US stocks is that president Trump is being given the benefit of the doubt that he will be able to deliver on tax and infrastructure,” said Greg McKenna, chief market strategist at AxiTrader.
Tokyo ended the morning session 1.1 percent higher, having slumped 1.4 percent Monday.
Hong Kong added 0.6 percent and Sydney rallied more than one percent while Seoul put on 0.2 percent, Singapore 0.5 percent and Taipei 0.3 percent.
“On balance the underpinnings are strong enough that we want to stay long” on stocks, Ted Weisberg, president at New York brokerage Seaport Securities, told Bloomberg TV. “We are viewing any kind of selloff as a buying opportunity.”
However, while equities picked up, the dollar remained subdued, sitting at four-month lows against the yen. The euro has been buoyed by upbeat data out of the eurozone.
Weighing on the greenback were comments from the head of the Chicago branch of the Federal Reserve Charles Evans that it might only need to lift borrowing costs twice this year considering an uncertain outlook for inflation and Trump’s big-spending, tax-cutting agenda.
The yen has climbed more than seven percent against the dollar since the start of the year while the single currency is up about five percent. Even the pound, which was battered last year by Britain’s vote to leave the European Union has risen five percent from its January lows.
The US unit had already been under pressure after Fed boss Janet Yellen said this month that the pace in rate hikes would be slower than initially expected. With Bloomberg, AFP
