The stock market surged Thursday to snap a three-day slump, tracking a Wall Street rally with investors increasingly confident Joe Biden and the Democratic Party will win the presidency and both houses of Congress, paving the way for a huge new stimulus.
The Philippine Stock Exchange Index jumped 74.78 points, or 1.3 percent, to 5,942.66 on a hefty value turnover of P19.6 billion. Gainers beat losers, 130 to 71, with 39 issues unchanged.
ABS-CBN Corp. rose 11.1 percent to P15, while Jollibee Foods Corp., the biggest fast-food chain, added 3.6 percent to P142.70.
Now Corp. of the Velarde family, the fourth major telecommunications firm, advanced 6.9 percent to P4.52, while Metro Pacific Investments Corp., which is into toll roads, water and electricity distribution, hospitals and infrastructure, climbed 3.6 percent to P4.04.
The rest of Asian markets mostly rose Thursday. Donald Trump’s decision to break off talks for a second rescue package gave global traders a massive jolt this week, but his call soon after for targeted help—including $1,200 handouts for Americans and help for small businesses—lifted hopes for some sort of deal.
But analysts said that while the end of the talks came as a blow, there are broad expectations that a new spending bill will be passed at some point as the economic recovery stutters and the coronavirus sees fresh spikes around the world.
“The market realizes that whoever wins, more than likely Biden now, there is going to be significant stimulus and additional infrastructure spending,” Andy Brenner, head of international fixed income at National Alliance, said in a note.
And the odds on a Biden win are shortening, with opinion polls putting him well ahead nationally and enjoying leads in battleground states such as Florida, where polling website FiveThirtyEight says Trump is losing the crucial senior vote.
A Biden victory and Democrats taking the Senate and House is also being priced into markets, observers said, as traders grow increasingly optimistic for a bigger rescue plan than what was being discussed before talks were curtailed Tuesday.
The party had initially proposed a stimulus of more than $3 trillion before lowering it earlier this year.
All three major Wall Street indexes ended with gains of close to two percent.
Asia mostly followed suit. Tokyo rose one percent, while Sydney, Mumbai and Taipei added more than one percent, while Seoul, Bangkok and Jakarta were also up.
Wellington jumped 1.8 percent after the New Zealand central bank indicated it could unveil fresh economy-boosting measures. The country’s dollar sank 0.4 percent against the US dollar on the news.
However, Hong Kong fell 0.5 percent after four days of gains, while Singapore was flat.
“The prospect of the Democrats sweeping all three levels of government continues to support stock markets in the run-up to the election day, which would put the Democrats in a position to all but rubber-stamp an energetic fiscal stimulus bill while lavishing the country with significant investment in health care, education, and infrastructure,” said Axi strategist Stephen Innes. With AFP