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Friday, March 29, 2024

GT Capital leads stock market’s rebound

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Local stocks rebounded Tuesday even as traders grew increasingly concerned that US lawmakers remain far apart in talks to raise the country’s borrowing limit to avert a default.

The PSE index, the 30-company bellwether of the Philippine Stock Exchange, gained 65 points, or 1.01 percent, to close at 6,588.90, as five of the six subsectors advanced, led by holding firms.

The index representing all shares also went up by 28 points, or 0.81 percent, to settle at 3,519.36 on a value turnover of P5.18 billion. Gainers edged losers, 94 to 91, while 53 shares were unchanged.

All 10 most active stocks ended in the green, led by GT Capital Holdings Inc. which climbed 4.21 percent to P495.00 and Ayala Corp. which rose 2.13 percent to P670.00.

Meanwhile, Asian markets were mixed as data showing China’s economic recovery remained sticky weighed on investor sentiment.

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While there is a general feeling that an agreement will be reached, Republican House Speaker Kevin McCarthy warned Monday that staff-level meetings were “not productive at all” and they were “nowhere near reaching a conclusion”.

For their part, Republicans are demanding spending cuts as a condition for passing the bill while Democrats want a “clean” increase of the borrowing limit with no strings attached.

US President Joe Biden, who has expressed confidence the two sides can bridge the gap, is scheduled to meet with McCarthy and other congressional leaders at the White House later Tuesday.

McCarthy’s comments came after Treasury Secretary Janet Yellen again said the government would likely run out of cash on June 1, meaning it would not be able to meet its debt repayment obligations, sparking a potentially devastating default.

Meanwhile, two top Federal Reserve officials suggested they were in favor of pausing the US central bank’s interest rate-hiking drive next month.

Chicago Fed boss Austan Goolsbee said he wanted to wait for the effects of more than a year of increases aimed at bringing inflation down from multi-decade highs.

“There is still a lot of the impact of the 500 basis points we did in the last year that’s still to come,” he told CNBC. “And you add on that there are tight credit conditions, and I think that we should be extra mindful.

“We need to take that into account, and the only way to do that is sit and watch it.”

Atlanta Fed president Raphael Bostic added that he favored staying put at the June meeting, though he threw cold water on any hope for a cut before the end of the year.

While Bostic made clear he favors putting the policy on hold for now, he also suggested that the next move may be more likely up than down, given the persistence of price pressures.

But Minneapolis Fed President Neel Kashkari said monetary policymakers still had plenty of work to do to rein in prices, citing the still strong labor market and the fact that inflation, at five percent, remained well above the bank’s two percent target.

Hong Kong was flat, with support coming from a rally in tech firms following news that US investor Michael Burry—who made his name predicting the 2008 housing crisis—had boosted his investments in e-commerce giants Alibaba and JD.com.

However, below-forecast readings on Chinese retail sales, industrial production and fixed asset investment reinforced the view that the world’s number two economy was still struggling to bounce back from years of tough zero-Covid measures.

“It is well understood that China’s recovery will not in any way, shape or form (recover) linearly like the recoveries of yesteryears, especially with youth unemployment hitting 20 percent,” said SPI Asset Management’s Stephen Innes.

“That is an unsettling and scary number.”

There were also losses in Shanghai, Sydney, Singapore, Mumbai, Jakarta and Bangkok, though Tokyo, Seoul and Taipei edged up. With AFP

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