Stocks rose Tuesday, as fears of a banking crisis eased thanks to the sale of fallen lender Silicon Valley Bank.
The PSE index, the 30-company bellwether of the Philippine Stock Exchange, gained 8 points, or 0.12 percent, to close at 6,603.15, as four of the six subsectors advanced.
The broader all-share index also went up 5 points, or 0.16 percent, to settle at 3,519.86, on a value turnover of P5.34 billion. Losers outnumbered gainers, 95 to 78, while 41 issues were unchanged.
Six of the 10 most active stocks ended in the green, led by Semirara Mining and Power Corp. which climbed 6.14 percent to P32.85 and SP New Energy Corp. which went up 3.57 percent to P1.74.
The board of Semirara on Monday approved a cash dividend payout totaling P14.88 billion, while SPNEC signed an agreement to sell a 16-percent stake to Metro Pacific Investments Corp.
Most Asian markets also traded higher. News that North Carolina-based First Citizens Bank had agreed to take over most of SVB boosted European stocks and Wall Street on Monday.
The gains were led by banking shares, following a rout last week over concerns that the turmoil in the sector could hit other major institutions, such as German giant Deutsche Bank.
Hong Kong and Tokyo closed higher, while Sydney, Singapore and Seoul also gained. Shanghai was down, however.
European equities were also higher in early trade, with London, Frankfurt and Paris all in positive territory.
Ray Attrill, head of FX strategy at National Australia Bank, said Tuesday that the acquisition by First Citizens had “helped set a positive tone” in global markets.
“Together with the absence of new scare stories over the weekend, banking shares have driven a rally across most major equity indices,” he wrote in a note.
On Monday, the World Bank warned that an anticipated economic slowdown in China is likely to drag global growth down to its lowest level this century as it proposed measures to prevent a “lost decade” of growth.
“We’ve grown used to China being the tractor of the global economy, and that will have to change because China’s growth rate is going to go down over time,” World Bank Chief Economist Indermit Gill said.
After last week’s tumult, traders were taking the opportunity to regroup, SPI Asset Management’s Stephen Innes said Tuesday.
“US stocks are trading moderately higher, and bonds lower Monday as bank stresses relax a bit further,” he said.
“This allows investors more breathing room to position ahead of a busy end-of-the-month data week docket and an even busier April” as first-quarter earnings approach.
And while markets have responded positively to the measures implemented by authorities to shore up the banking sector, there are still concerns about the impact of ongoing rate hikes by central banks, especially the US Federal Reserve.
Despite the recent turmoil, central banks have pushed on with monetary tightening as they focus on fighting inflation.
BlackRock Investment Institute strategists, however, see the campaign easing, according to Bloomberg News.
“We see major central banks moving away from a ‘whatever it takes’ approach, stopping their hikes and entering a more nuanced phase that’s less about a relentless fight against inflation but still one where they can’t cut rates,” Bloomberg quoted the strategists as saying. With AFP