Market up as US rebound prospects buoy optimism

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Share prices ended higher Wednesday amid optimism of an economic rebound in the US that can spillover into small economies like the Philippines.

The Philippine Stock Exchange index (PSEi) was up 214.26 points to 6,841.69, a 3.23 percent hike.

The broader all shares index was up 94.68 points to 4,117.98, a 2.35 percent hike.

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Gainers edged losers 153 to 52 with 49 stocks unchanged. Trading turnover reached P9.51 billion.

The peso closed at 47.82 to the dollar, down from 47.76 on Tuesday.

The currency opened at 47.76, an intraday high, and hit a low of 47.87. Trading turnover reached $1.04 billion.

The South Korean won and the Philippine peso slipped as the dollar firmed after a pickup in US manufacturing activity reinforced the prospects that policy tightening by the Federal Reserve isn’t too far off, Reuters reported.

Signs of a strong economic recovery in the United States has raised the chances of the Fed scaling back support measures, threatening Asia’s risk-sensitive markets which have held firm on the Fed’s reassurances of a continued dovish stance despite rising inflation.

Recent remarks from Fed policymakers have suggested that a discussion on tapering bond-buying was underway, with the upcoming Federal Open Market Committee meeting in mid-June possibly providing more clarity.

“Although the Fed insisted that rate hikes are still far off, it did not dismiss the prospect of starting an internal debate on tapering asset purchases,” analysts at Singapore-bank DBS said in a note.

Luis Limlingan, managing director at Regina Capital and Development Corp., said “investors focused on buying into the Philippine market as optimism about the US economic recovery was overshadowed by its inflation concerns.”

“The recent US manufacturing activity reading also pointed out labor shortages and supply bottlenecks. Others continued to assess the impact of the latest GCQ (general community quarantine) with heightened restrictions for NCR Plus,” he said.

Limlingan also noted commodity prices also rose “ahead of the scheduled OPEC+ meeting wherein leaders agreed to ease production cuts.”

Most actively traded SM Prime Holdings Inc. was up P1.45 to P38.05. Monde Nissin Corp. was flat at P13.48. Ayala Land Inc. was up P1.95 to P36.95. SM Investments Corp. was up P39.50 to P1,000. International Container Terminal Services Inc. was up P5.60 to P149.10.

Bank of the Philippine Islands was up P1.40 to P85.70. BDO Unibank Inc. was up P0.70 to P106.50. Ayala Corp. was up P30.50 to P810.50. AC Energy Corp. was up P0.11 to P7.42.

Megaworld Corp. was up P0.13 to P3.21.

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