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Monday, June 24, 2024

Stocks climb on positive US cues ahead of April inflation

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Philippine stocks opened the trading week in the green ahead of the release of April inflation data.

The benchmark Philippine Stock Exchange index closed at 6,652.49 Monday, up 36.94 points, or 0.56 percent, while the broader all-shares index rose 18.34 points, or 0.52 percent, to finish at 3,516.51.

Regina Capital Development Corp. Luis Limlingan said investors bought back shares as the index approached the support level of 6,600 after three consecutive days of decline.

“Additionally, investors are monitoring the ongoing corporate earnings report here at home,” Limlingan said.

Philstocks Financial Inc. research head Claire Alviar said the positive cues from the US markets on Friday also lifted sentiments at home.

Except for the property sector which lost 0.02 percent, other sectoral indices ended in the green led by financials (+1.3 percent), services (+1.25 percent) and mining and oil (+1.15 percent). Value turnover was at P4.02 billion.

Meanwhile, most Asian markets rose Monday after data showing fewer US jobs were created last month rekindled optimism interest rates will be cut this year, while mainland Chinese equities bounced on hopes for fresh government economic support.

A tech rally saw the Nasdaq lead Wall Street up after Friday’s non-farm payrolls figures, which helped soothe concerns that forecast-busting inflation figures at the start of the year meant the Federal Reserve would keep borrowing costs at two-decade highs for an extended period.

The 175,000 new jobs in April’s NFP report were much lower than the month before and also marked a big miss on expectations, while wage growth was also slightly lower than forecast.

Observers pointed out that while the reading indicated a slowdown in the world’s number one economy, it was not seen as a big enough miss to feed fears that a recession is on the horizon.

The news ramped up bets on the Fed cutting rates in September while investors also lifted their outlook on how many there would be, although the two priced in are still well short of the six envisaged at the start of the year.

“The softer wage growth and a slight increase in unemployment may ease some of the Federal Reserve’s concerns about implementing rate cuts this summer,” said Stephen Innes at SPI Asset Management.

“The unexpected weakness across the key labor series is a much-needed friendly surprise for policymakers.”

The advances on Wall Street on Friday — and another record for London — gave Asian investors a healthy lead, and most picked up the baton.

Shanghai was the standout performer as mainland investors returned from a long break to play catch-up with a global rally over the past few days.

Traders also cheered a report last week that leaders would look at ways to support China’s battered property sector as well as use measures to provide fresh support to the economy.

The tools outlined encompassed interest rates and the amount of cash banks must keep in reserve, Bloomberg News reported.

“Market sentiment appears to be incrementally improving,” said Nicholas Yeo of abrdn, pointing to improving traveler figures, market reforms and strong corporate releases.

“More material support via larger-than-expected fiscal spending and additional help for the property market would go a long way to materially improve sentiment in China.”

Hong Kong pushed recent gains into a 10th successive trading day, while Sydney, Singapore, Taipei, Mumbai, Jakarta and Manila were also up. Wellington edged down.

Paris and Frankfurt were also in positive territory.

Tokyo, London and Seoul were closed for holidays.

The dollar rose against the yen, clawing back some of the big losses it suffered Friday in response to the US jobs report.

The Japanese unit endured a volatile time last week after hitting its weakest level in 34 years, leading authorities to reportedly intervene in forex markets Monday and Wednesday. With AFP

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