The stock market surged to a year-high Friday on respectable corporate earnings in the first quarter of 2017 and expectations of a solid gross domestic product data in the first three months.
The Philippine Stock Exchange Index jumped 86.24 points, or 1.1 percent, to 7,841.99 on a value turnover of P14.6 billion. Gainers beat losers, 107 to 93, with 40 issues unchanged.
SM Investments Corp. of retail tycoon Henry Sy Sr. rose 2.5 percent to P774, while property unit SM Prime Holdings Inc. gained 3.2 percent to P32.20.
Universal Robina Corp., the biggest snacks food maker, advanced 2.8 percent to P183.30, while GT Capital Holdings of tycoon George Ty climbed 2.4 percent to P1,255.
Oil prices, meanwhile, extended the previous day’s sharp losses on Friday, dragging energy firms and Asian markets with them as investors are snagged by fresh global supply glut concerns.
Among the region’s main indexes Hong Kong fell 0.8 percent, Shanghai ended 0.8 percent lower and Sydney slipped 0.7 percent while Singapore retreated 0.2 percent. Taipei and Jakarta also suffered losses.
Investors are now awaiting the release Friday of jobs figures for April, which will be closely watched for clues about the Federal Reserve’s plans for hiking interest rates.
While traders are looking ahead to the release of crucial US jobs data later in the day, the collapse in crude prices has dented optimism on trading floors, with analysts warning about the possible effects on the economy.
Both main contracts tumbled around two percent in Asia”•following losses of almost five percent Thursday”•on fears about increased production from the US, Libya and Nigeria and the Opec cartel’s commitment to extending an output cut beyond a six-month agreement.
Renewed weakness in China, an expected hike in US interest rates”•which could make dollar-denominated oil more expensive to holders of other currencies”•and signs of slowing demand have also contributed to the dive.
“Opec has been looking down the barrel so to speak, of resurgent supply from Nigeria and Libya amongst Opec and of course, American shale which combined have completely offset the 1.8 million barrel per day production cut agreement,” said Jeffrey Halley, senior market analyst at OANDA, in a note.
“There was no light at the end of the tunnel for Opec and non-Opec producers… in fact, the light turned out to be the train coming the other way.”
Both contracts are now sitting at their lowest levels since Opec and Russia agreed in November to cut back production in a bid to raise prices.
“There’s disappointment that the production cuts we’ve seen from Opec and others has not had any impact at this stage on global inventory levels,” Ric Spooner, a chief market analyst at CMC Markets in Sydney, told Bloomberg News.
“The market seems to be much further away from a balanced situation than some had previously forecast. There is a possibility that oil could be headed to the low $40s range from here.”
The oil collapse sent Hong Kong-listed PetroChina tumbling 2.4 percent and CNOOC skidding more than one percent.
In Sydney, Woodside Petroleum lost 2.7 percent, Santos sank three percent and miner Rio Tinto lost two percent, with tumbling metals prices also acting as a drag. With AFP