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Thursday, May 23, 2024

Strong foreign inflows lift PH stock market

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The local bourse extended its gains Wednesday, boosted by strong foreign fund inflows.

The Philippine Stock Exchange index rallied by 58.08 points, or 0.88 percent, to close at 6,679.96, while the broader all-shares index climbed 17.88 points, or 0.51 percent, to finish at 3.511.44.

Except for mining and oil index which dropped 0.84 percent, all sectoral indices ended in the green led by financials (up 1.49 percent), property (0.84 percent) and holding firms (0.74 percent).

Philstocks Financial Inc. research analyst Claire Alviar said the market was lifted by foreign investors, which registered a net inflow of P341.1 million.

Alviar said the positive outlook on overseas remittances, which are targeted to grow by 3 percent this year, also boosted investor sentiment.

Meanwhile, most Asian markets rose Wednesday, with Hong Kong leading the pack for a second day following reports that Alibaba’s co-founders had bought huge stakes in the firm, while China announced fresh measures to boost bank lending.

The gains followed another record for the S&P 500 on Wall Street that came on the back of optimism over the US economic outlook and a positive run of earnings.

That has helped offset fading expectations the Federal Reserve will cut interest rates several times this year starting in March.

Hong Kong piled on more than three percent Wednesday, building on the previous day’s gains of more than two percent—a much-needed advance after tanking around 10 percent from the start of the year to Monday.

The Hang Seng’s rise was fueled by a 7.3 percent surge in Alibaba on news that Jack Ma and Joseph Tsai had bought about $200 million worth of shares between them, which Bloomberg said was seen as a positive signal to investors in the e-commerce titan.

Other Hong Kong-listed tech firms rallied, including Tencent, JD.com and Netease.

Alibaba’s New York-listed stock piled on nearly eight percent.

The firm remains down more than 70 percent from its record high seen in 2020, when Beijing began a clampdown on China’s tech sector that saw the cancellation of a planned IPO by subsidiary Ant Group worth $34 billion —a record at the time.

Traders were given an extra boost later Wednesday after the People’s Bank of China (PBoC) said it would next month lower the amount of cash banks must keep in reserve as it looks to ramp up lending to help kick-start the stuttering economy.

The 0.5 percentage point cut in the reserve requirement ratio would pump an extra $140 billion into financial markets, the PBoC said.

News of the reduction came a day after Bloomberg reported that Premier Li Qiang had called for more “forceful” measures to support China’s battered stocks, giving a shot in the arm to investor confidence.

Authorities were said to be looking at a raft of initiatives, and policymakers were seeking to mobilize nearly $280 billion, mainly from the offshore accounts of state-owned enterprises.

There were also gains in Shanghai, Sydney, Bangkok, Mumbai, Wellington, Taipei and Manila.

However, Tokyo — which rallied in January to three-decade highs thanks to rising hopes for the Japanese economy — fell after central bank boss Kazuo Ueda ramped up expectations it will soon move away from its ultra-loose monetary policy.

Bets are now on a more hawkish shift to the long-running easing measures in the first half of the year.

Seoul and Jakarta also eased.

London, Frankfurt and Paris all rose at the open.

Investors are keeping a close eye on the US earnings season, which analysts said had so far been largely positive, spurring hope that the world’s top economy will continue to grow healthily, even with interest rates still sitting at two-decade highs.

Wall Street remained optimistic despite bets on a March rate cut waning following warnings from Fed officials that they were determined to do what was needed to tame inflation, suggesting a more dovish turn was not yet in the offing.

“The excitement is kind of gone at this point and everybody’s sobering up a little bit after the pivot party,” said Emily Roland, at John Hancock Investment Management, referring to an end-of-year equity surge sparked by expectations of an early Fed reduction. With AFP

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