Stocks climb to break 5-day slump
The stock market climbed Wednesday on bargain-hunting to snap a five-day slump, with banks leading the rally.
The Philippine Stock Exchange Index rose 44.47 points, or 0.5 percent, to 8,404.69 on a value turnover of P8.6 billion. Losers, however, edged gainers, 113 to 100, while 48 issues were unchanged.
BDO Unibank Inc., the biggest lender in terms of assets, advanced 3.2 percent to P154.80, while Security Bank Corp., the sixth-biggest bank, gained 3 percent to P250.
Now Corp., which is bidding to become the country’s third telecommunications company, jumped 18 percent to P15.24, while Ionics Inc., a leading technology company, surged 13.2 percent to P2.65.
The rest of the Asian markets and the dollar were jolted Wednesday as news that Donald Trump’s top economics adviser had resigned revived trade war fears, while early excitement at North Korea’s denuclearization talks offer fizzled out.
Investors were unable to maintain the positive momentum and Seoul reversed its morning course to end 0.4 percent down, though the won held its gains.
Tokyo closed down 0.8 percent, with Kobe Steel plunging 7.4 percent a day after its CEO resigned—leaving no successor—after the firm revealed widespread submission of false strength and quality data for products shipped to hundreds of clients worldwide.
Hong Kong shed one percent in the afternoon and Shanghai closed down 0.6 percent, with Taipei 0.4 percent off.
Sydney dropped one percent as data showed Australia’s economic growth slowed in the final three months of last year and missed expectations. Singapore also shed one percent, while Bangkok, Jakarta and Mumbai tumbled.
Investors already on edge over expected US interest rate rises have been rattled further since the US president last week unveiled plans for controversial tariffs on steel and aluminum imports as part of his “America First” agenda.
Equities initially plunged on Thursday’s announcement, which has been condemned by business leaders and foreign governments, before rebounding this week as dealers bet that the final measures would not be as bad as initially thought.
However, analysts said news that Gary Cohn—who had fought against the tariffs—had stepped down could leave the field open for protectionist hawks to dictate policy, ramping up the chances of a global trade war.
“His resignation increased the risk tenfold that President Trump will follow through with far-reaching trade tariffs given that Cohn was said to be remaining in his role to convince Trump to reverse his trade policy views, or at least temper them,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
“While the world appears to be in a safer place this morning due to the denuclearization olive branch offered by North Korea, the market is no less safe from the wrath of Trump’s trade policies.”
US bond yields sank as traders rushed into safe assets, with the dollar falling against its major peers as well as high-yielding currencies as traders bet that any trade war would hurt the US unit.