Stock market rallies; Meralco tops gainers
The stock market rebounded Tuesday on select buying, led by banks and Manila Electric Co., to end a two-day slump.
The Philippine Stock Exchange Index rose 49.62 points, or 0.6 percent, to 8,379.64 on a value turnover of P8.9 billion. Losers, however, beat gainers, 111 to 76, with 51 issues unchanged.
Meralco, the biggest retailer of electricity, surged 5.3 percent to P322 after the company was added to the standard index of MSCI. SM Investments Corp. of retail tycoon Henry Sy Sr. added 2.3 percent to P975.
Bank of the Philippine Islands, the third-largest lender by assets, rose 1.8 percent to P100.80, while East West Banking Corp., the thirteenth largest bank, gained 3.3 percentto P34.25.
The rest of Asian markets fell on Tuesday following a tepid lead from Wall Street, while investors await movement on stalled US tax cuts with fears growing that the reform push could come off the rails.
After weeks of gains fueled by strong earnings and optimism about the global economy, world markets have been tempered in recent days as dealers cash out and valuations sit unnervingly high.
In Washington, Republican lawmakers are struggling to agree a tax overhaul deal with senators and representatives providing differing plans, leading to worries the reforms could collapse in a similar way to the Obamacare repeal.
“Tax looks to be getting bogged down in a manner we saw with the attempt to repeal Obamacare and a manner I didn’t expect,” said Greg McKenna, chief market strategist at AxiTrader.
“Passage of a bill will be a big boon for markets. But there remains much wood to chop it seems.”
World markets had surged on hopes for lower taxes when Donald Trump was elected US president a year ago.
Hong Kong was 0.1 percent off and Shanghai retreated 0.5 percent following the release of soft data on Chinese retail sales, factory output and investment.
Sydney shed 0.9 percent, Singapore was off 0.5 percent and Seoul shed 0.2 percent.
Tokyo’s Nikkei ended slightly lower, giving up morning gains and extending a sell-off to fifth straight days. The index had hit a quarter-of-a-century high on Wednesday.
On currency markets, the pound remained under pressure but was stable after Monday’s sell-off that was sparked by concerns over British Prime Minister Theresa May’s political future as reports said dozens of her ruling Conservative Party MPs were backing a move to oust her.
May’s troubles come as London faces pressure to meet a two-week deadline set Friday by the EU’s chief Brexit negotiator Michel Barnier for a deal on exit terms ahead of a December EU summit.
“Suffice to say that in the absence of progress within UK political circles this week and next toward offering up a higher Brexit divorce bill, sterling could be down another five percent or more by month end,” said Ray Attrill, head of forex strategy at National Australia Bank.
“If instead Mrs May does somehow manage to pull a proverbial rabbit out of the hat, it will be five percent or more stronger. The pound will be a very sharp toy in the coming few weeks,” he said in a commentary. With AFP