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Market rises; SM Investments up

The stock market bounced back Wednesday on bargain-hunting in step with the rest of Asia, boosted by comments from Bangko Sentral ng Pilipinas Governor Benjamin Diokno that further policy rate and reserve requirement cuts could be done before the end of the year.

The Philippine Stock Exchange Index rose 36.17 points, or 0.4 percent, to 8,078.21 on a value turnover of P5.4 billion. Losers, however, beat gainers, 109 to 93, with 39 issues unchanged.

Diokno said in an event with bankers Wednesday the policy-making Monetary Board would consider vital economic data, such as inflation rate and the economic growth data in the second quarter, before deciding on the rate and reserve requirement cuts.

SM Investments Corp. of the Sy Group advanced 3.2 percent to P980, while Globe Telecom Inc., the biggest telecommunications company, gained 2 percent to P2,174.

Filinvest Land Inc. of the Gotianun Group climbed 1.6 percent to P1.80, while Alliance Global Group Inc. of tycoon Andrew Tan added 1.3 percent to P15.40.

The rest of Asian markets mostly rose Wednesday after two days of losses with investors focusing on congressional testimony by Federal Reserve boss Jerome Powell.

After a mildly positive lead from Wall Street and two days of selling, Asia investors trod a careful path Wednesday.

Hong Kong edged up 0.2 percent in late trade and Sydney rose 0.4 percent while Singapore and Seoul each put on 0.3 percent.

Wellington jumped more than one percent and Taipei gained 0.9 percent with Bangkok and Jakarta also up.

There was also a little optimism on news that top-level negotiators from China and the US had held phone talks on trade.

But Tokyo ended down 0.2 percent and Mumbai was off 0.4 percent in the afternoon.

Shanghai shed 0.4 percent after data showed June factory prices were unchanged from a year ago and fell from the previous month, hit by the US trade war.

Fed officials have helped spur a rally in world equities in recent weeks by taking an increasingly dovish tone regarding monetary policy, fueling expectations they would cut borrowing costs sharply to support a stuttering economy.

But hopes for a deep reduction were dealt a blow on Friday by data showing the US created far more jobs than expected in June. The report sparked a sell-off in stocks and sent the dollar surging.

Powell is now due to appear before both houses of Congress to give his opinion about the state of the world’s top economy, which investors will pore over for an idea about his interest rate plans.

Observers said that while a big cut—of 50 basis points—has all but been dismissed, the Fed is expected to unveil at least a 25 point reduction at its next gathering this month.

“It’s unlikely the Fed would risk ignoring the markets’ signaling, especially after taking a dovish turn at the June (policy) meeting, which sparked a broad risk-on rally and overshadowed concerns about slowing US and global growth,” said Stephen Innes at Vanguard Markets. With AFP

“After all, there is that small thing called ‘credibility issues,’ so why on Earth would the Fed want to lead markets  down the primrose path?”

Anna Han, equity strategist at Wells Fargo Securities, took an upbeat view on the outlook. With AFP

Topics: Stock Market , Philippine Stock Exchange Index , Philippine Stock Exchange , PSE , PSEi , SM Investments
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