Stocks rally; BDO, JG Summit up
Stocks rallied Tuesday following another strong Wall Street performance but most other Asian markets struggled to maintain momentum as focus turns to Federal Reserve boss Jerome Powell’s congressional debut.
The Philippine Stock Exchange Index rose 92.40 points, or 1.1 percent, to 8,592.38 on a value turnover of P9.2 billion. Gainers beat losers, 119 to 94, with 43 issues unchanged.
BDO Unibank Inc., the largest lender in terms of assets, advanced 4.7 percent to P157 after reporting Monday that net profit in 2017 increased 7 percent to a record P28.1 billion from 2016 on strong lending and deposit growths.
JG Summit Holdings Inc. of industrialist John Gokongwei surged 5.6 percent to P75, while unit Universal Robina Corp., the biggest snack food maker, climbed 4.1 percent to P151.
Alliance Global Group Inc. of tycoon Andrew Tan gained 4 percent to P14.98.
Tokyo stocks, meanwhile, enjoyed fresh gains Tuesday. Equities have been pushing higher since the first week of February saw a plunge that wiped trillions off valuations worldwide, though analysts warn that with prices still high volatility could return.
The S&P 500 on Monday climbed above the level it touched before the sell-off, while the Dow and Nasdaq also climbed more than one percent.
Tokyo ended 1.1 percent higher, Sydney and Wellington each put on 0.2 percent, while Jakarta also rose.
But profit-taking sent other key markets into negative territory.
Hong Kong fell 0.4 percent, Singapore shed 0.3 percent and Seoul eased 0.1 percent, while Taipei gave back 0.2 percent.
Shanghai slipped more than one percent, though Innes added that Xi Jinping’s move to lift term limits on his presidency would be “a boon to regional economic sentiment as it guarantees continued market reforms and staying the course on the (Belt-and-Road) trade-and-infrastructure program.”
This week sees a number of key events, including the release of US economic growth and inflation data.
But firstly new Fed chief Powell will speak before top congressional committees on Tuesday and Thursday, with his remarks being closely analyzed for clues about monetary policy.
Nerves are still raw after the recent sell-off and his views on monetary policy will be closely watched, though many are tipping him to stick to predecessor Janet Yellen’s course.
“In some ways his hands are a bit tied,” BNP Paribas Asset Management senior economist Steven Friedman told Bloomberg TV.
“The path of least resistance for him is to really stick to the script, which is to reiterate that there is a lot of underlying momentum in the economy, that gives them more confidence in their projections, but ultimately the path of interest rate increases is going to be gradual.”
With eyes on Powell, the dollar is struggling against its main peers as well as other higher-risk currencies, despite the euro coming under pressure after the head of the European Central Bank suggested he would be patient in removing crisis era stimulus.