The stock market rallied Tuesday along with most of the Asia after China slashed the quarantine time for visitors, fueling hope for a boost to the embattled economy.
The Philippine Stock Exchange Index surged 106.59 points, or 1.7 percent, to 6,345.41 on a value turnover of P7.4 billion. Gainers beat losers, 121 to 70, with 47 issues unchanged.
Fiber broadband provider Converge ICT Solutions Inc. jumped 10.8 percent P21.70, while Universal Robina Corp. of the Gokongwei Group, the largest snack food maker, rose 4.9 percent to P106.50.
Globe Telecom Inc. of the Ayala Group, the second-biggest telecommunications firm, advanced 5.6 percent to P2,280, while sister unit AC Energy Corp. climbed 4.5 percent to P8.14
Most Asian markets reversed early losses Tuesday and oil continued its recent rally.
China’s move came as Beijing and Shanghai appeared to have contained a COVID outbreak that had forced officials to impose lockdowns which compounded global supply chain snarls.
Authorities said inbound travelers would now only have to quarantine for 10 days, instead of the three weeks that had been in place during the pandemic.
The news provided a much-needed boost to shares, which had mostly been down on renewed concerns about central bank interest rate hikes and soaring inflation.
On Monday the central People’s Bank of China pledged to provide support to the world’s number two economy.
The gains extended a rally enjoyed last week on bets that a possible recession next year could allow finance chiefs to ease up on their monetary tightening campaign.
“This relaxation sends the signal that the economy comes first,” Li Changmin, at Snowball Wealth, said. “It is a sign of the importance of the economy at this point.”
After spending the morning in the red, Hong Kong, Shanghai, Tokyo, Seoul and Wellington turned higher, while there were also gains in Sydney and Bangkok. Mumbai, Taipei and Jakarta slipped while Singapore was flat.
London, Paris and Frankfurt were all up as traders digest comments from European Central Bank boss Christine Lagarde, who said it would go “as far as necessary” to bring inflation back down to its two percent goal.
However, Huang Yanzhong of the New York-based Council on Foreign Relations warned: “It’s not surprising that China has managed to return to so-called zero, after all the huge effort it’s made.
“But that doesn’t mean it can claim a thorough and durable victory because it didn’t eradicate the virus,” he said. “Unless they thoroughly fence off Beijing and Shanghai, the virus could sneak in anytime.”
Still, while the inflation and rate situation remains a worry, compounded by the war in Ukraine, some commentators remain relatively upbeat as the second half of the year approaches.
Market strategist Louis Navellier said in a note: “While it’s sobering that the first half of the year is the worst since 1970, history also says that when the first half of the year is down at least 15 percent the second half of the year is up every single time with an average return of 24 percent.”
And Ben Laidler, a global markets strategist at eToro, added that a lot of the expected economic weakness had been largely factored in by dealers. With AFP