Markets rally as weak US factory growth tempers rate fears

MANILA, Philippines — Asian markets rallied yesterday and the dollar eased after weak US factory data sparked optimism that a series of big interest rate hikes were taking their toll, allowing the Federal Reserve to ease its foot off the pedal.

All three main indexes in New York enjoyed a bumper start to the quarter after data showed US manufacturing growth slowed more than expected in September to its weakest in more than two years.

Nicole Webb, at Wealth Enhancement Group, told Bloomberg Television that while the Fed will at some point stop hiking, “how long they hold us or suspend us there is still in question.”

Still, Asian markets built on the Wall Street surge.

Tokyo and Seoul were among the leaders, despite news that North Korea had fired a missile over Japan for the first time since 2017.

Singapore, Mumbai, Bangkok, Taipei, Jakarta and Wellington were also sharply higher.

Likewise, Philippine stocks rallied yesterday, with the main composite index soaring by 204.57 points or 3.54 percent to close at 5,987.72.

The broader All Shares index was also sharply higher, gaining 96.35 points or 3.09 percent to close at 3,210.48.

Unicapital Securities said the Philippine market was ripe for a technical rebound, saying that “oversold conditions prompted bargain hunting among investors.”

Most indexes finished in positive territory, with holding firms and property among the biggest gainers.

However, total value turnover remained thin at P4.586 billion. Market breadth was positive with 140 gainers against 60 losers while 40 issues were unchanged.

The rally in equities came as the dollar weakened owing to lower expectations for US monetary tightening, with the pound also supported by the UK government’s decision to scrap a planned cut in the top rate of income tax.

Meanwhile, oil also continued to rise on expectations OPEC and other major producers will slash output this week, having become spooked by a plunge in the commodity on recession fears. – AFP