Philippine stocks surged by more than 100 points Tuesday to close above 7,400 level, while the peso retreated against the US dollar on rising world crude prices.
The Philippines Stock Exchange index rallied by 129.90 points, or 1.77 percent, to close at 7,456.31, while the broader all-shares index advanced by 61.73 points, or 1.53 percent, to reach 4,086. 45.
“Investors continued to draw optimism from the expectations that the Bangko Sentral ng Pilipinas will deliver another policy rate cut in their upcoming meeting this week,” said Philstocks Financial Inc. research head Japhet Tantiangco.
“The positive cues from Wall Street’s record performance overnight also helped in Tuesday’s session,” he said.
Trading was quite strong with net value turnover posting P6.09 billion, higher than the year-to-date average of P5.21 billion. Foreigners were net buyers with net inflows amounting to P638.15 million.
Meanwhile, the peso tumbled to 57.86 against the US dollar Tuesday from 57.47 Monday on lingering concerns over the Middle East tension.
Israeli Prime Minister Benjamin Netanyahu had told US President Joe Biden he would not strike Iran’s crude or nuclear facilities in retaliation for a missile attack earlier this month.
Hong Kong and Shanghai stocks tumbled again after traders were left disappointed by a lack of detail in a raft of measures announced last week to boost China’s economy.
However, most other Asian markets ended higher after another record close for the Dow and S&P 500 on Wall Street, with the third-quarter reporting season about to get underway.
Both main oil contracts dropped more than four percent — having lost at least two percent Monday — after the Washington Post reported that Netanyahu had pledged to target Iran’s military rather than its crude and nuclear sector.
Investors have been on edge since Tehran launched a barrage of missiles at Israel at the start of the month, fueling concerns of a response that could spark a region-wide conflict.
The commodity has swung wildly in recent weeks after Tel Aviv opened a new front against Hezbollah militants in Lebanon, while also continuing its battle against Hamas in Gaza.
Netanyahu on Monday vowed to hit Hezbollah without mercy, a day after the Iran-backed group’s deadliest strike on Israel since the start of their war in late September.
If the response is “non-escalatory — (for example) tit-for-tat rockets aimed into the desert — then it looks bearish for oil,” said Neil Wilson, chief market analyst at Finalto trading group.
“If it’s a full-on strike aimed at national energy infrastructure then it would seem way more escalatory.”
Adding to the downward pressure on oil is concern that China would struggle to reignite the world’s second-biggest economy after a much-anticipated news conference on Saturday left investors wanting.
There had been hope Finance Minister Lan Fo’an would unveil a multi-billion-dollar package of support including fiscal help to go alongside measures announced in September that largely focused on the troubled property sector.
The disappointment, which came after another briefing that fell short last Tuesday, has dampened a rally on Chinese markets, with Hong Kong and Shanghai paring the blockbuster surge that greeted the initial batch of stimulus.
Weaker-than-expected trade and inflation data for September highlighted the need for economic help, though analysts warned they did not see any details being released until an upcoming Communist Party meeting that has yet to be set.
Key figures later in the week, including on retail sales, trade and economic growth, could provide a fresh update on the state of the country’s finances.
“Everywhere you look, China is in desperate need for fiscal support, with very weak domestic demand alongside an economy facing deflationary pressures and softer global demand,” said Rodrigo Catril at National Australia Bank.
Hong Kong fell more than three percent Tuesday and Shanghai lost more than two percent, though there were gains in Tokyo as traders there returned from a three-day weekend.
Sydney, Seoul, Singapore, Taipei, Bangkok, Manila and Jakarta also rose, though Mumbai edged down.
London and Paris were also down though Frankfurt gained. With AFP
