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Friday, March 29, 2024

Stocks up slightly; BPI advances

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The stock market rose Monday after China unveiled fresh stimulus measures and below-par US jobs data reinforced expectations the Federal Reserve will cut interest rates this month.

The Philippine Stock Exchange Index added 26.65 points, or 0.3 percent, to 7,960.12  on a value turnover of P7.7 billion. Losers, however, beat gainers, 103 to 91, with  51 issues unchanged.

Bank of the Philippine Islands, the third-biggest lender in terms of assets, advanced 4.2 percent to P92.70, while Now Corp. of the Velarde Group climbed 19 percent to P3.69.

GT Capital Holdings Inc. of the Ty Group gained 2.3 percent to P921, while Globe Telecom Inc., the second-biggest telecommunications firm, rose 1.7 percent to P1,980.

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Most Asian markets, meanwhile, started Monday on a positive note to build on last week’s gains.

The People’s Bank of China on Friday said it would slash the amount of cash lenders must keep in reserve to its lowest level in 12 years, freeing up more than $100 billion for the stuttering economy.

The announcement came two days ahead of the release of figures showing a contraction in imports and exports as the trade war with the United States bites deeper, with speculation that further measures could be on the way.

“Concerns of a more protracted trade war have already sapped business confidence in China and any way you want to slice and dice the data at the end of the day it makes for a convincing argument for the PBoC to turn on the monetary taps,”  said Stephen Innes, Asia-Pacific market strategist at AxiTrader.

Asian investors were broadly upbeat on the move, while a weaker-than-forecast reading on US jobs creation increased the chance the Fed will reduce borrowing rates again at its policy meeting this month.

The news suggested the world’s number-one economy was also feeling the pinch from the trade row and the bank’s boss Jerome Powell said in a speech Friday it will “continue to act as appropriate to sustain this expansion,” while noting “significant risks” to growth.

Tokyo ended 0.6 percent higher, Shanghai added 0.8 percent and Seoul jumped 0.5 percent. Singapore and Taipei each added 0.2 percent, while Seoul gained 0.5 percent and Sydney was marginally higher. There were also gains in Mumbai, Jakarta and Bangkok.

Hong Kong was slightly up but gains were tempered by profit-taking after last week’s surge as well as ongoing worries about months-long protests in the city, with fresh violence over the weekend.

Neil Wilson, chief market analyst at Markets.com, warned: “With central banks refilling the punch bowls, markets can shrug off the weakening economic data and put off the coming dawn for another hour. The party goes on for now, but it’s looking increasingly precarious.”

Traders will turn their attention back to Westminster, where MPs are expected to pass a bill preventing Prime Minister Boris Johnson from taking Britain out of the European Union without a divorce agreement. Most economists have warned that a no-deal Brexit would hammer the economy. With AFP

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