Stocks rally; Ayala leads gainers
The stock market rose Wednesday following another record close on Wall Street overnight, as a fresh round of strong corporate earnings reinforced confidence in the global economy.
The Philippine Stock Exchange Index gained 23.43 points, or 0.3 percent, to 8,303.35 on a value turnover of P5.9 billion. Losers, however, beat gainers, 107 to 91, with 39 issues unchanged.
Conglomerate Ayala Corp. climbed 2 percent to P1,019, while Security Bank Corp., the fifth largest lender in terms of assets, advanced 2.4 percent to P255.
SM Investments Corp. of retail tycoon Henry Sy Sr. added 2.1 percent to P960, while Global Ferronickel Holdings Inc. rose 2.7 percent to P2.64 after reporting a net profit of P799.9 million in the first nine months of 2017 from just P7 million year-on-year.
Meanwhile, a phenomenal run of 16 straight gains finally ended in Tokyo on Wednesday as a late bout of profit-taking saw the Nikkei close in negative territory for the first time this month.
However, most other Asian markets rose. Caterpillar, considered a bellwether of economic optimism, and industrial giant 3M both posted healthy reports, helping the Dow to a sixth straight record in seven trading days.
The news boosted hopes for other companies as the earnings season gets into full swing.
“Last night’s report from Caterpillar, which beat profit and sales estimates, underwrote what has been improved sentiment about the outlook for global growth,” said Greg McKenna, chief market strategist at AxiTrader, in a note.
Japanese shares ended the morning higher, putting them on course to extend a run never seen since the Nikkei’s creation almost 70 years ago.
However, traders who had helped push the market up more than five percent since September 29 decided to cash out in the afternoon and Tokyo ended down 0.5 percent.
The run had been fueled by hopes that re-elected Prime Minister Shinzo Abe would push ahead with further economy-boosting measures as well by ongoing weakness in the yen against the dollar.
“It’s no surprise to see the steam expire after days of rallies, as investors might want to take profit,” said Hideyuki Suzuki, head of investment information department at SBI Securities.
Elsewhere in Asia, Hong Kong added 0.4 percent in the afternoon following two days of losses. Shanghai closed up 0.3 percent after China’s President Xi Jinping unveiled his top decision-making body. This contained no potential successor, raising speculation he intends to stay on past the end of his second five-year term as ruling party chief.
Sydney, Seoul and Taipei each gained 0.1 percent and Singapore was marginally higher.
Mumbai’s Sensex surged one percent to a record high a day after India approved a $32 billion recapitalization plan for state-owned banks to help clean up their books and revive investment.
The dollar largely held its gains from last week’s passage of a key budget bill that smoothed the way for Donald Trump’s tax cuts. But investors are keeping watch on events in Washington as the president deals with fractious members of his own Republican party.
“The big news is that House Republicans are now scheduled to release a full tax reform bill to the public next Wednesday, but Senate mutter tempered the mood as Republican Senators Bob Corker, John McCain, Rand Paul may not support tax overhaul,” said Stephen Innes, head of Asia Pacific trading at OANDA. With AFP