Shares climb as Trump backs debt ceiling deal

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DESPITE ongoing geopolitical tensions in East Asia, the Philippine Stock Exchange index (PSEi) climbed slightly yesterday to return to the 8,000 level as investors viewed positively the US government’s proposal to raise its debt ceiling, easing worries over the possibility of a government shutdown.

The bellwether PSEi went up by 39.01 points or 0.48% to close at 8,022.98 on Thursday.

The all-shares index also climbed 23.63 points or 0.49% to 4,762.84.

“Philippine equities rebounded in line with Wall Street’s recovery rally as investors shook off concerns over North Korea’s arms buildup for the time being,” read the market recap of RCBC Securities, Inc.

Wall Street climbed on Wednesday, helped by news of an agreement to extend the debt limit, as stocks bounced back from a day-earlier selloff.

The Dow Jones Industrial Average rose 54.33 points or 0.25% to 21,807.64; the S&P 500 gained 7.69 points or 0.31% to 2,465.54; and the Nasdaq Composite added 17.74 points or 0.28% to 6,393.31.

“Philippine stocks edged higher along with the US after congressional leaders and President Donald Trump agreed to extend the debt limit deadline and fund the government through mid-December,” Luis A. Limlingan, Regina Capital Development Corp. managing director, said via text.

Mr. Trump, siding with Democrats over his fellow Republicans, said he agreed to pass an extension of the US debt limit until Dec. 15, potentially avoiding an unprecedented default on US government debt.

All sector sub-indices ended in the green, with mining and oil taking the lead as it rose 222.89 points or 1.65% to 13,654.71. Services added 19.66 points or 1.13% to 1,746.4; industrials increased by 92.36 points or 0.82% to 11,243.31; property rose 20.68 points or 0.55% to 3,781.45; financials went up 5.25 points or 0.26% to 1,968.76; and holding firms climbed 10.44 points or 0.13% to 7,881.31.

AB Capital Securities, Inc. senior equity analyst Lexter L. Azurin said the market “reached a significant volume,” with the index reflecting the performance of the US markets.

Trading value went up to P7.57 billion from Wednesday’s P6.72 billion, with 1.75 billion worth of shares changing hands.

Gainers beat losers, 114 to 77, while 55 names closed unchanged. Foreigners sold more shares, leading to a net selling of P896.45 million, higher than Wednesday’s P315.63 million.

Mr. Azurin said he expects trading in the next few sessions to stay within range. “I think the market might trade sideways for the next few days given that we don’t expect any major surprise or catalysts that make significant moves, so I think that’s what the markets [are] waiting [for].” senior analyst Justino B. Calaycay, Jr. said in a phone call that amid the lack of fresh inputs in the market, there will be “tough bargain hunting” while “looking closely at North Korea.” — Anna Gabriela A. Mogato with Reuters