Stocks surged Tuesday along with the rest of Asia on growing speculation US President Joe Biden is about to roll back some of the Trump-era tariffs on Chinese goods as he looks for ways to rein in inflation, though sentiment remains at a premium owing to fears of a recession.
The Philippine Stock Exchange Index jumped 126.37 points, or 2 percent, to 6,309.99 on a value turnover of nearly P4 billion. Gainers beat losers, 119 to 71, with 46 issues unchanged.
Noodles maker Monde Nissin Corp. advanced 5.3 percent to P13.90, while AC Energy Corp. of the Ayala Group climbed 4.1 percent to P8.40.
SM Prime Holdings Inc. of the Sy Group rose 4 percent to P37.50, while Universal Robina Corp. of the Gokongwei Group increased 3.2 percent to P114.
Most Asin markets also rose Tuesday. The mood on trading floors has become increasingly gloomy in recent months as observers warn that sharp interest rate hikes aimed at curbing price rises could cause a contraction, compounding uncertainty caused by Russia’s war in Ukraine.
Still, equities were on the up Tuesday on talk that the White House is about to remove duties on some of the hundreds of billions of dollars worth of imports from China, with reports saying an announcement could come this week.
With some of the tariffs due to expire soon, officials in Washington have been discussing the measures with an eye on inflation, which is sitting at four-decade highs.
And in a sign that something could be on the cards, China’s state-run Xinhua news agency said Treasury Secretary Janet Yellen and Vice Premier Lui He had held discussions.
“The two sides agree that as the world economy is facing severe challenges, it is of great significance to strengthen macro-policy communication and coordination between China and the United States,” it said.
“And jointly maintaining the stability of the global industrial and supply chains is in the interests of both countries and the whole world.”
Reports also said that Biden was considering launching new probes into industrial subsidies—allowing for more targeted measures in strategic areas—to appease China hawks.
Hong Kong, Tokyo, Sydney, Seoul, Taipei, Mumbai, Wellington and Jakarta were all in positive territory. However, Shanghai gave up early gains and ended marginally down, while Singapore was also off.
US markets were closed Monday for a holiday.
“Given that inflation remains the White House public enemy number one, (investors are) leaning toward a gradual rollback of some China tariffs as it would reduce end costs to US consumers,” said SPI Asset Management’s Stephen Innes.
However, some commentators said that while the removal of some tariffs would be widely welcomed by traders, they were unlikely to have a long-lasting effect on inflation.
“Markets are likely to react positively on a knee-jerk because at this point we are hungry for any signs of positive news,” Charu Chanana, of Saxo Capital Markets, said.
“But we don’t see the move impacting the global growth and inflation dynamics in a significant way.” With AFP