Stocks rallied Friday in step with the gains in Wall Street overnight on indications that the US economy remained strong despite higher interest rates.
The Philippine Stock Exchange Index surged 104.37 points, or 1.6 percent, to 6,692.65 on a value turnover of P4.6 billion. Gainers overwhelmed losers, 116 to 68, with 47 issues unchanged.
Aboitiz Equity Ventures Inc. of the Aboitiz Group jumped 8 percent to P59.40, while unit Union Bank of the Philippines, the ninth biggest lender in terms of assets, climbed 4.3 percent to P85.
Aboitiz InfraCapital Inc., the Aboitiz Group’s infrastructure unit, is acquiring the entire stake of Megawide Construction Corp. and GMR Airports International BV in GMR-Megawide Cebu Airport Corp., the operator of Mactan Cebu International Airport, for P25 billion.
Emperador Inc. of business tycoon Andrew Tan, the largest liquor maker, advanced 5 percent to P20.85, while Jollibee Foods Corp., the biggest fast-food chain, rose 2.5 percent to P245.80.
The rest of Asian markets were mixed Friday and the dollar held gains as rate hike expectations grew, with traders now focusing on a key US jobs report later in the day.
Wall Street ended with a late rally, with the Dow and S&P 500 snapping a four-day retreat, though the Nasdaq extended its losing streak.
Asia continued to struggle, though there were some positives.
Hong Kong, Sydney, Singapore, Seoul, Taipei, and Bangkok fell, while Tokyo was marginally down. Shanghai, Wellington, Mumbai and Jakarta were up.
Oil prices rose on fading expectations for an Iran nuclear deal anytime soon, but they remained under severe pressure from a range of issues including the strengthening dollar, COVID lockdowns in China, and worries about a demand-sapping recession.
Healthy readings on US factory activity, unemployment claims, and private jobs creation indicated the world’s top economy remained strong despite rising interest rates and four-decade-high inflation.
But analysts said the figures were a case of “good news in bad news” as they would give the US Federal Reserve more room to keep tightening monetary policy, with officials lining up to commit to beating inflation even if that causes a recession.
Bets are increasing on a third successive 75-basis-point increase at its September meeting.
OANDA’s Edward Moya warned Fed officials could even start considering rising into 2023, with inflation data later this month becoming increasingly important.
“If the economy remains resilient over the next few months, the Fed-funds futures market might believe the Fed won’t be done tightening at the end of year,” he wrote in a commentary.
“Markets might start pricing in a February rate hike as well, if pricing pressures don’t show further signs of easing with the September 13th inflation report.”
Michael Hewson, of CMC Markets, said: “Not only did we hear Fed chairman Jay Powell offer the unequivocal message that the Federal Reserve would continue to hike rates until the job is done, but every Fed official since then has offered the same message, along with the postscript that rates were unlikely to come down any time soon, and certainly not before 2024. With AFP