The stock market rallied Tuesday on bargain hunting led by blue chip issues, after global losses suffered Monday following news of a spike in new cases in Beijing, Florida, Texas and Tokyo, among other places.
The Philippine Stock Exchange Index jumped 117.93 points, or 1.9 percent, to 6,281.75 on a value turnover of nearly P7 billion. Gainers overwhelmed losers, 141 to 54, with 46 issues unchanged.
Merrymart Consumer Corp., the fast-rising supermarket chain owned by businessman Edgar Sia II, surged 50 percent for the second straight day to P2.25 from a initial public offering price of P1.
GT Capital Holdings Inc. of the Ty Group advanced 6.3 percent to P491, while Alliance Global Group Inc. of tycoon Andrew Tan climbed 5.6 percent to P7.29.
Bank of the Philippine Islands, the third-biggest lender in terms of assets, rose 4.3 percent to P71.
Asian and European equities also shot higher Tuesday as growing fears about a possible second wave of infections was overshadowed by the US Federal Reserve’s launch of a massive program to support Main Street businesses hit by the virus lockdown.
The rally across the region helped wipe out most of the losses suffered Monday.
Investors were also taking heart from reports the US is eyeing a huge infrastructure stimulus as well as the easing of lockdowns around the world, with several European countries opening their borders and British shops trading again.
But the main driver of the gains was the Fed’s Main Street Lending Program and an emergency lifeline under which the Fed will buy up to $750 billion in corporate bonds.
The announcement saw all three main indexes on Wall Street reverse early losses to end well up, and the gains filtered through to Asia.
Tokyo soared almost five percent, getting an extra boost from a Bank of Japan move to ramp up aid for firms struggling with virus fallout.
Seoul surged more than five percent and Sydney almost four percent, while Hong Kong jumped 2.4 percent and Shanghai more than one percent.
Mumbai and Taipei were also more than one percent up, Jakarta 3.2 percent higher and Bangkok 2.5 percent up. Wellington edged up 0.8 percent.
The Fed several times in recent weeks was on the verge of rolling out the Main Street scheme, but held off as it expanded the criteria to reach more struggling companies.
The plan is part of a massive financial backstop put in place by the bank to protect the economy from the worst of the virus crisis. The government has also pledged trillions of dollars in stimulus support.
The US Chamber of Commerce called it “a lifeline for businesses that have been disrupted by the health and economic consequences of COVID-19.”
Fed boss Jerome Powell will give two days of congressional testimony from Tuesday, which observers will be following after he caused ructions on markets last week with a sobering warning about the economic outlook.
“With the Federal Reserve back in business backstopping corporate credit, and printing money to lend to companies directly, it was immediately back to business-as-usual for the peak-virus, buy everything herd,” said OANDA’s Jeffrey Halley.