The stock market jumped Monday on bargain-hunting and on analytics that the Philippines has already flattened the curve on new coronavirus infections.
The Philippine Stock Exchange Index surged 150.76 points, or 2.6 percent, to 5,935.85 on a thin value turnover of P3.9 billion. Gainers overwhelmed losers, 132 to 65, with 37 issues unchanged.
“Actually, cases have already flattened, and we said around two weeks ago that we are seeing a flattening of the curve by the end of August or early September,” said Prof. Guido David of the UP Institute of Mathematics Sunday.
Major property developer Ayala Land Inc. advanced 6.4 percent to P30, while sister firm AC energy Philippines Inc. climbed 7 percent to P2.89.
SM Investments Corp. of the Sy Group rose 5.7 percent to P894, while sister unit SM Prime Holdings Inc. added 3.2 percent to P28.85.
The rest of Asian equities struggled Monday following last week’s painful sell-off, with a mixed US jobs report offsetting a pledge from Federal Reserve boss Jerome Powell that interest rates would remain rock-bottom for years.
China-US tensions and a lack of progress in Washington stimulus talks—all against the backdrop of the coronavirus pandemic—were keeping markets from surging.
Closely watched non-farm payrolls data Friday showed the US economy created 1.37 million jobs last month, slightly better than expected, while unemployment plunged to 8.4 percent from 10.2 percent—well below forecasts.
Powell described the report as “a good one” but added the bank would not change its ultra-loose monetary policy until the economy was back on track.
“We think that the economy’s going to need low interest rates, which support economic activity, for an extended period of time,” he said. “It will be measured in years.”
But while the reading was good, a closer look showed 344,000 jobs were for temporary workers hired for a census. Earlier in the week, private-sector payrolls came in well short of estimates, indicating the recovery continues to stutter.
Tokyo closed 0.5 percent lower with SoftBank plunging more than seven percent after reports said the conglomerate had been engaging in high-risk derivatives trading of tech shares in New York.
The Financial Times said the firm had “stoked the fevered rally in big tech stocks” that helped the Nasdaq rocket higher since March.
Shanghai was down one percent, while Hong Kong dropped 0.5 percent a day after fresh unrest in the city as pro-democracy demonstrators clashed with police on a day that canceled elections were due to take place.
But Sydney was marginally higher, while Seoul and Wellington were also in positive territory.
Wall Street’s three main indexes suffered more losses, albeit shallower than Thursday’s rout that hammered the tech sector as traders took profits from months of huge gains.
“Risk assets remain fragile following Thursday’s tech-led rout and volatility spike,” said Ben Emons, at Medley Global Advisors.
“With stimulus having been key for supporting equities and such lofty valuations, its renewal will be crucial not only for the recovery, but as a driver for equities as job risks mount.” With AFP