The stock market rose for the third straight day Thursday as investors began to see a glimmer of light at the end of the tunnel in the fight against coronavirus, following news of a possible breakthrough in the search for a treatment.
The Philippine Stock Exchange Index advanced 56.74 points, or 1 percent, to 5,700.71 on a value turnover of P6.6 billion. Gainers best losers, 120 to 71, with 46 issues unchanged.
International Container terminal Services Inc., the biggest port operator and owned by tycoon Enrique Razon Jr., climbed 3.9 percent to P89.60, while Metropolitan Bank & Trust Co., the second-largest lender in terms of assets, also advanced 3.9 percent to P39.05.
Universal Robina Corp., the biggest snack food maker, rose 3.2 percent to P125.90, while major property developer Ayala land Inc. added 3.1 percent to P31.95.
The rest of Asian markets rallied again and oil prices built on the previous day’s surge.
Top US epidemiologist Anthony Fauci’s comments that Gilead Science’s remdesivir “has a clear-cut, significant, positive effect in diminishing the time to recovery” fanned hopes that lockdowns—already being loosened in some nations—could be lifted more quickly, allowing people back to work to kickstart the battered economy.
The announcement allowed investors to look past data showing the US economy had contracted 4.8 percent in the first quarter, its worst performance in a decade, and the Federal Reserve’s warning that it would likely tank even further in April-June.
The central bank did provide some support, though, by pledging to keep interest rates at zero until the economy has weathered the crisis and is ready to resume growth. On Thursday France said its economy had fared even worse and contracted 5.8 percent.
“While a treatment is not a vaccine, a successful treatment would be a game-changer for the virus and would help facilitate a greater rollback of containment measures,” said National Australia Bank’s Tapas Strickland.
“It could also give consumers greater confidence to resume pre-pandemic activity.”
Wall Street and Europe’s main indexes all rose at least two percent, and Asian equities—already enjoying a bright week on signs of an easing in the virus—took up the baton Thursday.
Tokyo returned from a one-day holiday to end 2.1 percent higher, while Sydney, Singapore, Taipei and Jakarta also piled on more than two percent.
Mumbai jumped three percent, with Shanghai and Bangkok breaking the one percent mark, though Wellington dropped more than one percent.
Hong Kong and Seoul were closed for public holidays.
“One of the main reasons for the strong recovery in risk sentiment… is the homogeneity of the recession’s driver,” said AxiCorp’s Stephen Innes.
“Compared to previous downturns that were more multifaceted and professedly more difficult to unwind, the eradication of the single recessionary input—the virus—via a vaccine can cobblestone the way for an expeditious recovery in global economic output.” With AFP
China released data Thursday showing that factory activity grew again in April, though at a slower pace than in March, as the country slowly emerges from the crisis following a long-running lockdown that slammed the economy. With AFP