Stocks rise as index nears 8,000

The stock market extended its rally Thursday, with the Philippine Stock Exchange Index close to topping the 8,000-point mark.

The PSEi added 65.56 points, or 0.8 percent, to 7,985.23 on a value turnover of P10.1 billion. Gainers beat losers, 109 to 82, with 51 issues unchanged.

Blue chips led the market rally on expectations the Philippine economic growth will stay firm and household consumption will recover after inflation decelerated to a seven month low of 5.1 percent in December.

Alliance Global Group Inc. of tycoon Andrew Tan advanced 4.4 percent to P12.72, while Security Bank Corp., the sixth biggest lender in terms of assets, climbed 4.3 percent to P178.40.

PLDT Inc., the largest telecommunications firm, rose 4 percent to P1,234, while affiliate and conglomerate Metro Pacific Investments Corp. gained 3.8 percent to P4.92.

The rest of Asian markets mostly turned south Thursday as investors took a breather after rallying this week on optimism over China-US trade talks and the Federal Reserve’s softer tone on interest rates.

Hong Kong was down 0.2 percent in the afternoon after rising around five percent over the previous four days, while Shanghai closed 0.4 percent off.

Seoul eased 0.1 percent, while Wellington, Taipei, and Mumbai fell, though Sydney gained 0.3 percent and Singapore rose 0.5 percent.

There was also growing unease over the US government shutdown, which is now in its third week, after President Donald Trump walked out of a meeting with Democrats to resolve the issue, meaning it will likely drag on for some time to come.

Tokyo led the losses, with exporters hit by a rising yen against the dollar after minutes from the Fed’s latest policy meeting showed the policy board happy to slow its pace of rate hikes to prevent a slowdown in the economy.

Central bankers said they “can afford to be patient” owing to low inflation and uncertainty about the outlook and while there would likely be more increases in borrowing costs, it would be a “relatively limited amount.”

The minutes reinforced comments from Fed boss Jerome Powell last week that there was no “pre-set” plan on rates, which fanned a global market rally. Fears about rising costs were a key factor in driving equities lower last year.

They also fueled a dollar sell-off with the greenback weakening across the board and the Chinese yuan at its highest level since late August.

While the dollar stabilized against its major peers Thursday, it saw more losses against higher-yielding currencies, with the new-found optimism providing a boost to riskier assets.

“I’m happy to see that there was caution in the minutes,” Alicia Levine, chief strategist at BNY Mellon Investment Management, told Bloomberg TV.

“You want it to be that this is what the (Fed policy board) really believes, that caution is warranted, that they’re going to be data-dependent, and there are alternative outcomes that they should be aware of. I take great comfort in these minutes.” With AFP

Topics: Philippine Stock Exchange Index , Alliance Global Group Inc. , Andrew tan , Security Bank Corp.
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