The stock market rose for the third straight day Monday, with the benchmark index back into the 8,000-point territory after trade tensions between the US and Mexico eased.
The Philippine Stock Exchange Index gained 61.41 points, or 0.8 percent, to 8,045.39 on a value turnover of P7.4 billion. Losers, however, edged gainers, 91 to 84, with 63 issues unchanged.
Universal Robina Corp., the biggest snack food maker, climbed 2.4 percent to P173, while conglomerate Metro Pacific Investments Corp. increased 2.5 percent to P4.56.
International Container Terminal Services Inc., the largest port operator, rose 1.8 percent to P139.90, while Jollibee Foods Corp., the biggest fast-food chain, added 1.7 percent to P280.
The rest of Asian markets rose Monday and the Mexican peso rallied more than two percent after Donald Trump dropped threatened tariffs against Mexico, while weak US jobs data fanned expectations the Federal Reserve will cut interest rates next month.
Speculation about a cut in borrowing costs saw the dollar retreat against most high-yielding currencies, although the pound remains subdued owing to Brexit uncertainty.
Regional markets were well up Monday with Hong Kong jumping more than two percent and Shanghai 0.9 percent higher, with investors cheered by better-than-forecast Chinese exports data.
Tokyo ended 2.2 percent higher, Singapore climbed 0.9 percent, Seoul added 1.3 percent and Taipei rallied 1.5 percent with Jakarta 1.4 percent higher. Wellington was slightly down and Sydney was closed for a public holiday.
Traders breathed a sigh of relief the North American neighbors reached a last-minute deal Friday that averted the imposition of five percent levies on Mexican imports and opening up of another front in Trump’s global trade battle. Trump had warned of the levies if Mexico did not meet his demands regarding immigration from Central America.
However, Neil Wilson, chief market analyst at Markets.com, said: “While this is positive for risk assets, one should be cautious that this may only embolden Mr. Trump to use tariffs as a policy tool for the pursuit of non-economic interests.
“As previously suggested, the EU could be next—maybe to get the 2 percent defense spending target.”
Observers also pointed out that while the agreement was good news, the stand-off between China and the United States remains unresolved, with eyes on a possible meeting between Trump and Xi Jinping at the G20 summit in Japan this month.
“The focus will now shift back to the G20 and China,” strategists at TD Securities including Richard Kelly wrote in a note. “Despite the positive result with Mexico, the US-China trade dispute is a different creature, and tensions remain high.”
At the weekend finance ministers of the G20 issued a post-meeting communique saying “growth remains low and risks remain tilted to the downside.”
It added that “trade and geopolitical tensions have intensified” but they “stood ready to take further action” if it is needed. With AFP