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Business

Local stocks surge despite regional downturn

Iris Gonzales - The Philippine Star
Local stocks surge despite regional downturn
The Philippine Stock Exchange index (PSEi) closed at 6,263.94, up by 91.10 points or 1.48 percent with all sectoral gauges finishing in the green.
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MANILA, Philippines — Local stocks jumped yesterday despite weakness in other Asian markets.

The Philippine Stock Exchange index (PSEi) closed at 6,263.94, up by 91.10 points or 1.48 percent with all sectoral gauges finishing in the green.

Total value turnover including the tendered shares of Metro Pacific Investments Corp. reached P35 billion. Market breadth was positive, 115 to 59 while 53 issues were unchanged.

Michael Ricafort of Yuchengco-owned Rizal Commercial Banking Corp. said the recent gains in the local market showed that it is defying the hawkish signals from local monetary officials and also from some US Fed officials amid the need to better manage inflation and inflation expectations.

Meanwhile, Asian shares mostly sank yesterday over worries about a possible US government shutdown and the troubled Chinese economy.

Investors are watching for Chinese economic indicators being released later in the week.

“The Chinese property woes are far from over, as the notorious developer Evergrande defaulted on its four billion yuan onshore bond repayment and delayed the restructuring meetings,” said Tina Teng, market analyst at CMC Markets APAC & Canada.

Wall Street clawed back some of its steep losses from last week. The S&P 500 rose 17.38, or 0.4 percent, to 4,337.44, coming off its worst week in six months.

Realization is sinking in that the Federal Reserve will likely keep interest rates high well into next year. The Fed is trying to ensure high inflation gets back down to its target, and it said last week it would likely cut interest rates in 2024 by less than earlier expected. Its main interest rate is at its highest level since 2001.

The growing understanding that rates will stay higher for longer has pushed yields in the bond market up to their highest levels in more than a decade. That in turn makes investors less willing to pay high prices for all kinds of investments, particularly those seen as the most expensive or making their owners wait the longest for big growth.

Higher yields are at the head of a long line of concerns weighing on Wall Street. Not only have oil prices jumped by $20 per barrel since June, economies around the world are looking shaky. The resumption of US student-loan repayments may also weaken what’s been the US economy’s greatest strength: spending by households.

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