Stocks rose Friday in line with a global rally as traders grow increasingly hopeful that US lawmakers will hammer out a deal to lift the debt ceiling and avert a calamitous default.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, gained 35 points, or 0.54 percent, to close at 6,664.55 as four of the six subsectors advanced.
The index, representing all shares, went up 13 points, or 0.39 percent, to settle at 3,548.37 on a value turnover of P5.77 billion. Gainers matched losers at 84 apiece, while 65 issues were unchanged.
Seven of the 10 most active stocks ended in the green, led by BDO Unibank Inc. which climbed 2.56 percent to P140.00 and Ayala Corp. which rose 1.61 percent to P694.00.
Most Asian markets rose, but the regional mood was tempered by losses in Hong Kong and Shanghai fuelled by worries over China’s economy.
After weeks of lumbering talks on Capitol Hill, congressional leaders appeared ready to put a proposal to lawmakers before the government runs out of cash, said to be around June 1.
In his most upbeat remarks yet on the high-stakes standoff, Republican House Speaker Kevin McCarthy said: “We’re not there — we haven’t agreed to anything yet — but I see the path (where) we could come to an agreement.”
McCarthy secured the Speaker’s gavel in January by pledging to his party’s ultra-conservative Freedom Caucus that any raise in the borrowing limit would only come with an evisceration of the federal budget.
He and Democratic Senate Leader Chuck Schumer were planning to call for a vote in the coming days, and on Friday, a White House official said “steady progress” was being made.
The optimism was shared by other lawmakers, with Texas Republican Kay Granger saying a deal was “close”. And Democrat Steny Hoyer said: “I think we are going to get a deal”.
But McCarthy ally Patrick McHenry, chairman of the US House Financial Services Committee, warned the two sides were “not close to being done”.
Still, all three main indexes on Wall Street rallied, extending the more than one percent gains enjoyed Wednesday.
In Asia, Tokyo raced higher again, building on a recent surge in the Nikkei to a three-decade high even as data showed Japanese inflation continued to sit well above the central bank’s target, adding to pressure for it to tighten monetary policy.
Sydney, Seoul, Singapore, Mumbai, Taipei, Wellington and Jakarta were also well up.
“Although there has been no official pen to paper, there is enough white smoke emanating from Capitol Hill for investors to cheer after policymakers in Washington said that a bill to raise the US debt ceiling may be put on the table next week,” said SPI Asset Management’s Stephen Innes.
But Hong Kong sank more than one percent owing to a sharp drop in tech firms after ecommerce titan Alibaba reported below-par earnings that reinforced concerns about China’s stuttering economy and consumer demand.
Shanghai also fell, and traders are keeping an eye on the central People’s Bank of China to see if it unveils any fresh stimulus measures following a string of below-forecast economic figures.
“The recovery in China is slowing down,” Ashish Shah, at Goldman Sachs Asset Management, said. “We all expected it wouldn’t be a straight line — you will go through waves.” With AFP
