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Stock market extends rally; BDO, Jollibee lead advance

The stock market rallied for the second straight day Wednesday ahead of the release of second-quarter data on the gross domestic product today, while gold topped $2,000 an ounce for the first time.

The Philippine Stock Exchange Index advanced 58.08 points, or 1 percent, to 5,833.58 on a value turnover of P5.4 billion. Gainers beat losers, 128 to 75, with 27 issues unchanged.

BDO Unibank Inc. of the Sy Group , the biggest lender in terms of assets, climbed 4.4 percent to P91, while sister unit SM Prime Holdings Inc. added 1.9 percent to P29.

Metropolitan Bank & Trust Co. of the Ty Group, the second-largest bank, rose 4.2 percent to P34.90, while Jollibee Foods Corp., the biggest fast-food chain, increased 3.8 percent to P131.

The rest of Asian markets tracked another record on Wall Street Wednesday as traders monitored talks on a key US stimulus package, though they remain on edge as Washington and Beijing plan a review of their much-vaunted trade deal.

Still, long-running uncertainty about the global economic outlook caused by the coronavirus pandemic and a weak dollar helped push gold to new records after breaking the $2,000 barrier for the first time, while Europe braces for a second wave of infections.

Hong Kong rose 0.6 percent and Shanghai ended up 0.2 percent while Seoul and Singapore each piled on more than one percent. Mumbai, Taipei and Jakarta were also in positive territory.

And the yellow metal continued its march in Asian trade, touching a new record of $2,039.93, with analysts tipping it to continue higher still as investors bet on the long-term view that inflation will surge once the economic and virus crisis has passed.

Tokyo, Sydney, Bangkok and Wellington were slightly lower.

With key unemployment benefits and a ban on evictions already lapsed for millions of Americans, Republicans and Democrats remain far apart in talks on a fresh economic rescue package.

House Speaker Nancy Pelosi has warned the Democrats will not budge from their $3-trillion plan, which includes an extension of a $600-a-week supplementary benefit. The Republicans’ $1 trillion proposal sees that handout slashed to $200.

There are worries that failure to reach a deal will deliver a hefty blow to the already stuttering economy.

However, while the two parties appear unable for now to come together on a deal crucial to prevent a financial meltdown, there is an expectation that with an election three months away, they will eventually meet somewhere in the middle.

“The political wrangling has been going on for over one week, but dealers are still a little optimistic that an agreement will be reached,” said David Madden at CMC Markets.  

“It was reported that talks have been productive, so that has been keeping the bulls engaged.”

But the ever-present specter of China-US tensions was again in play after the two sides said they would hold talks on August 15 to review their trade deal signed to much fanfare in January.

With the relationship between the two growing increasingly spiky—owing to issues including Hong Kong, the coronavirus and more recently TikTok—there are worries over the agreement, which brought an end to a protracted and painful trade war. With AFP

Topics: Stock Market , Philippine Stock Exchange , PSE , Philippine Stock Exchange Index , PSEi , Global stock market , BDO , Jollibee
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