Stocks climbed to a new record high Tuesday, tracking the gains in other Asian markets and after the International Monetary Fund retained its strong growth forecast for the Philippines this year.
The Philippine Stock Exchange index, the 30-company benchmark, peaked to 8,409.92 in the afternoon before closing slightly lower at 8,398.04 Tuesday, up 30 points, or 0.4 percent, from Monday.
The heavier index, representing all shares, also gained 12 points, or 0.3 percent, to settle at 4,922.71, on a value turnover of P7.2 billion. Losers outnumbered gainers, 103 to 91, while 51 issues were unchanged.
Eleven of the 20 most active stocks ended in the green, led by aviation company MacroAsia Corp. which jumped 9.2 percent to P16.94. Food company RFM Corp. advanced 3.3 percent to P4.70, while conglomerate SM Investments Corp. rose 2.3 percent to P940.
The IMF said in its latest World Economic Outlook it was expecting the Philippine economy to grow 6.6 percent in 2017 and 6.7 percent in 2018.
Meanwhile, the Philippine peso plummeted to 51.44 against the US dollar Tuesday, amid rising imports ahead of the holiday season. Daily turnover reached $929 million, up from the previous day’s $658 million.
It was the local currency’s weakest level since it settled at 51.49 a dollar on Aug. 18, 2017, at the height of the tensions between the United States and North Korea.
ING Bank Manila senior economist Joey Cuyegkeng said the local currency weakened again after two successive weeks of strength versus the greenback.
“Weakness of Philippine peso resumed after market had reflected acquisition-related inflows in late September while import demand for US dollar regained dominance in the exchange market,” Cuyegkeng said.
“Relatively dovish comment from the central bank in the wake of an acceleration of inflation in September also allowed for some weakness,” he said.
Analysts said the improving global economic outlook boosted the demand for the dollar which is the main currency for foreign trade.
In Asian markets, South Korean and Japanese traders sent shares rallying Tuesday as they returned from a long weekend while most other markets tacked on gains despite a soft lead from Wall Street.
Investors started the week on a positive note Monday as they looked past a surprise drop in US jobs and bought into other positives from Friday’s employment report that indicated the world’s top economy is in rude health.
Unease over US-North Korea tensions also eased as Kim Jong-Un’s regime did not launch, as some had feared, another long-range missile to mark Tuesday’s anniversary of the founding of the ruling party.
Still, Seoul’s Kospi jumped 1.6 percent Tuesday and Tokyo finished 0.6 percent up at its highest level in more than two years, as they played catch-up with the rest of Asia.
Shanghai recovered from early losses to close up 0.3 percent, as the Chinese market remained positive on the central bank’s plan to cut reserve ratio for lenders, dealers said.
Hong Kong also recovered to sit in the afternoon 0.5 percent higher at a 10-year high. There were also gains in Wellington, Manila and Bangkok.
However, Sydney was marginally lower and Singapore shed 0.1 percent.
Europe’s main stock markets nudged lower at the start of trading on Tuesday. London and Paris both dropped fractionally, while Frankfurt lost 0.1 percent.
US markets all ended down in limited trade owing to the Columbus Day holiday, with the Nasdaq snapping streaks of nine straight gains and six straight records.
On currency markets, the euro fought off uncertainty over Spain’s separatist crisis and rose against the dollar following a forecast-beating reading on German industrial output, which boosted expectations the European Central Bank will begin to raise interest rates soon.
Added to that were comments from ECB governing council member—and noted hawk—Sabine Lautenschlager, who said the days of easy money should be at an end, including winding in its massive holdings of bonds.
The single currency was sitting in the high $1.17 region Tuesday, up almost a cent from the end of last week.
The pound was also slightly healthier. though dealers remain wary as embattled British Prime Minister Theresa May’s future looks uncertain after last week’s gaffe-filled Conservative party conference speech.
May told parliament Monday she expected “leadership and flexibility” from her European Union counterpart in Brexit talks. With AFP, Bloomberg