Philippine stocks surged past the 7,500 level Monday, its highest closing since January 2020, on strong foreign buying and continued investor enthusiasm.
The bellwether Philippine Stock Exchange index hit an intra-day high of 7,602.70 before closing at 7,554.68, up by 86.76 points, or 1.16 percent, from Friday’s finish.
The all-shares index advanced by 41.32 points, of 1.02 percent, to end at 4,082.97.
“Investors continue to cheer the significant slowdown in Philippine inflation rate, and it strengthens the case for further monetary policy easing by the Bangko Sentral ng Pilipinas,” Philstocks Financial Inc. research head Japhet Tangtiangco said.
Tantiangco said hopes that the US Federal Reserve would deliver more rate cuts also boosted investor sentiment.
The latest US inflation rate data is slated for release Thursday.
The BSP’s Monetary Board is scheduled to meet before the end of the week to decide on its policy rates.
Meanwhile, the peso tumbled to 56.82 against the US dollar Monday from 56.29 Friday on concerns over the rising global crude prices amid the tension between Israel and Iran.
Among PSE’s subsectors, properties rose 2.05 percent, while services climbed 1.9 percent.
Banks declined 0.46 percent, while mining and oil dropped 0.39 percent.
Value turnover reached P7.6 billion, higher than year-to-date average of P5.21 billion.
Foreign investors were net buyers, with net inflows amounting to P1.35 billion.
Grocery chain Puregold Price Club Inc. emerged as top index gainer, advancing by 8.49 percent to P33.85, while Bank of the Philippine Islands was the main index loser, declining by 1.66 percent to P142.40 apiece.
Asian markets also rose Monday after a blockbuster US jobs report soothed any concerns about the world’s top economy, while the dollar held gains with traders scaling back bets on another bumper interest rate cut.
Oil prices rose as traders await Israel’s response to Iran’s missile barrage last week amid fears of a region-wide war in the Middle East.
All three main indexes on Wall Street rallied Friday on data showing a forecast-busting 254,000 US jobs were created last month and the unemployment rate fell. With AFP
The reading was the best in six months and sharply higher than readings in July and August, which had sparked worries that the economy could be heading for a recession.
The dollar rallied on the reading as investors lowered their expectations the Federal Reserve will cut interest rates 50 basis points for a second straight meeting when it gathers this month.
“The September payrolls print was meaningfully better than expected,” said Taylor Nugent, a senior markets economist at National Australia Bank.
“It was going to take more bad news for the (board) to match the extent of cuts in near-term pricing.
“But instead the data was supportive of (its) assessment that the US labour market is not primed for imminent, sharper deterioration and may even be holding up a little better than expected.”
Inflation data later in the week will be closely watched by traders hoping for more of an idea about the Fed’s decision-making.
Jim Reid at Deutsche Bank Research said: “My personal view was always that the amount of rate cuts priced in since mid to late summer was only likely if we had a recession.
“If we didn’t, then the rates market overall was too pessimistic. I would still say that today.”
The stronger dollar against the yen boosted Japanese stocks, with the Nikkei 225 climbing almost two percent, while Hong Kong extended its recent rally fueled by China’s raft of economic stimulus measures.
There were also gains in Sydney, Singapore, Seoul, Taipei, Jakarta, Bangkok and Manila.
Wellington and Mumbai edged down, while London, Paris and Frankfurt were on the back foot in early trade.
Shanghai was closed for a holiday.
Crude prices reversed early losses after a volatile day Friday that saw them soar five percent at one point before paring the gains.
The initial rally came after US President Joe Biden said he was “discussing” possible Israeli strikes on Iranian oil sites in retaliation for Tehran’s barrage.
But the commodity pared the gains after Biden advised Tel Aviv against such action, saying he was trying to rally the world to avoid the escalating prospect of all-out war in the Middle East.
Still, investors are awaiting the next developments in the crisis on the first anniversary of Hamas’s deadly attack on Israel that led the country to fighting wars against the Iran-aligned militant group in Gaza and Hezbollah in Lebanon. With AFP
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