Stocks surged Monday along with the rest of Asia, as investors rediscovered some verve after the release of healthy US data and as China eases some of its strict COVID curbs in Shanghai and Beijing, lifting hopes for the world’s number two economy.
The Philippine Stock Exchange Index advanced 96.18 points, or 1.4 percent, to 6,822.32 on a value turnover of P7 billion. Gainers beat losers, 114 to 76, with 51 issues unchanged.
Conglomerate Ayala Corp. of the Ayala Group rose 3.2 percent to P701, while unit AC Energy Corp. also gained 3.2 percent at P7.17.
SM Investments Corp. of the Sy Group climbed 2.8 percent to P862, but fiber broadband provider Converge ICT Solutions Inc. fell 1.7 percent to P26.05.
The gains in Asian markets extended a positive end to last week for global equities with some commentators saying there was a growing hope that the months-long sell-off may have run its course.
Wall Street provided a strong lead and snapped a series of weekly losses, with Friday’s rally supported by data showing an easing of the key personal consumption expenditures (PCE) price index.
Markets have been pummeled this year as soaring prices—caused by the Ukraine war, supply chain snags and China’s lockdowns among other things—forced central banks to hike interest rates and warn of more to come.
The US reading lent hope that the worst of the inflation surge may have passed and could allow the Federal Reserve to ease back from its hawkish rate hike drive later in the year.
May jobs data—due for release on Friday—should provide a fresh snapshot of the economy and possibly an idea about the Fed’s next policy moves.
Asian investors followed the lead from their US counterparts.
Hong Kong put on more than two percent after a strong Friday performance fueled by a rally in tech firms, while Tokyo, Sydney, Shanghai, Seoul, Mumbai, Taipei, Bangkok and Wellington were also well up.
An easing of long-running lockdown measures in Shanghai provided a much-needed lift to sentiment, with China’s biggest city seeing a drop in COVID cases, while some curbs were also being lifted in Beijing.
Officials have also announced measures to ease the impact on the world’s number two economy, which has been hammered by the restrictions.
Still, OANDA’s Jeffrey Halley said: “The devil is in the detail of course, and workers in both cities still face challenges either going to work, or even being allowed to leave the house.”
He added that traders were also aware another flare-up could see the reimposition of tightened restrictions.
“Such minutiae are usually ignored by markets when it doesn’t suit the preferred narrative, and so it is today. Asia is pricing in peak virus in China and a recovery in growth,” he said.
The possibility that the measures could be gradually removed helped oil prices rise, with Brent at one point topping $120 for the first time in two months as traders bet on a pick-up in demand.
That comes as European leaders are said to be edging towards a deal to impose sanctions on imports of crude from Russia in retaliation for its invasion of Ukraine. With AFP