Market extends gains; Apollo and SMIC advance

Stocks rose for a fourth day following the recent rally in Asian markets on optimism that coronavirus infections will fall as vaccinations are rolled out.

The Philippine Stock Exchange index, the 30-company benchmark, gained 41 points, or 0.6 percent, to close at 7,065.55 Tuesday.  It was the bellwether’s highest finish in two weeks.

The broader all-share index rose 17 points, or 0.4 percent, to settle at 4,249.93 on a value turnover of P12.3 billion. Gainers outnumbered losers, 127 to 104, while 40 issues were unchanged.

Sixteen of the 20 most active stocks ended in the green, led by Apollo Global Capital Inc. which surged 17.4 percent to P0.250 and Premiere Horizon Alliance Corp. which jumped 13.1 percent to P2.94.

SM Investments Corp. went up 3.5 percent to P1,056.00, while AC Energy Corp. gained 0.8 percent to P7.81.

Meanwhile, Asian markets were mixed Tuesday. While there is a growing sense of concern that valuations may have gone too far for now—having enjoyed a strong rally in recent months—the general mood is one of optimism that the global economy will break out as life gradually returns to normal.

The US president’s $1.9-trillion rescue bill is winding its way through Congress and while Biden might not get the broad bipartisan deal he had hoped for, the Democrat majority in both houses is likely to be enough for them to pass a large package.

The giant spending splurge—which includes $1,400 cash handouts—comes as the US immunization program gathers pace and figures show new cases, deaths and hospitalizations are tumbling. 

A similar picture is emerging in Britain, while Europe is also seeing improvements.

Adding to the positivity, statistics out of Israel — which has led the world in vaccinations — appear to show the jabs are working.

“Financial markets are forward-looking, and it looks like the US and Europe have Covid cases heading in the right direction,” said OANDA’s Edward Moya.

“Reflation bets are running wild and that could be enough to keep this stock market party going.”

All three main indexes on Wall Street ended at new highs, and Asia extended the rally Tuesday.

Shanghai led gains, rallying two percent, while Tokyo rose to a new 30-year high. Hong Kong, Mumbai, Singapore, Manila and Bangkok also were up, but Sydney, Seoul, Jakarta and Wellington fell.

Axi strategist Stephen Innes said buying was “further buoyed by an upbeat set of earnings from the holiday season and vaccine optimism”.

The inoculation drive, he said, “provides the ultimate recovery safety net that will allow people to participate on all those pre-Covid activities like the simple pleasures of going to a movie or having a meal out at the local eatery again”.

Crude prices continued to climb on expectations for a surge in demand as economies reopen, with Brent holding around 13-month highs above $60.

“Oil’s fundamentals are looking strong again on both (the) supply and demand side,” said Moya.

“Despite demand being down about five million barrels year-over-year, optimism is high that vaccine rollouts will have key parts of the global economy return to normal.”

Bitcoin pushed to a new record of $47,492.93 after getting a huge boost from news that Elon Musk’s electric carmaker Tesla had invested $1.5 billion in the cryptocurrency and said it would soon accept it as payment.

Gold was also seeing increasing interest from dealers seeking the safe haven as a hedge against an expected jump in inflation with the world economy kicking back into gear and Biden’s stimulus being rolled out. 

The metal has risen around three percent since hitting a two-month low on Friday and was trading at $1,841 an ounce. With AFP