Shares may extend climb on latest US-China deal
PHILIPPINE SHARES may rally when the market reopens on Friday as sentiment could get a boost after the United States and China finalized a deal to restore the tariff truce between the two countries.
This week has been volatile for the stock market as the US and China on Monday started a fresh round of trade talks in London, with the Philippine Stock Exchange index (PSEi) starting the week at the 6,400 level but falling to the 6,300 range in the next two days, with shares mostly moving sideways as investors monitored the negotiations between the world’s two largest economies.
On Wednesday, the PSEi rose by 0.53% or 33.65 points to close at 6,381.32, while the broader all shares index went up by 0.47% or 17.69 points to 3,776.19.
Philippine financial markets were closed on Thursday for Independence Day.
“The PSEi’s movement was driven by global trade war-related and geopolitical forces,” First Metro Investment Corp. Head of Research Cristina S. Ulang said.
Ms. Ulang said the local bourse could continue its climb when trading resumes on Friday after the US and China struck a deal to get their trade truce back on track.
“We see an extended PSEi rally on the latest US-China trade ‘done’ deal, as announced by US President Donald J. Trump last night,” Ms. Ulang said.
Global stocks slipped on Thursday as investors sized up a benign US inflation report and the fragile trade truce between Washington and Beijing, Reuters reported.
Attention in financial markets this week has been on the US-China trade talks which culminated in a framework agreement that would remove Chinese export restrictions on rare earth minerals and allow Chinese students access to US universities.
“We made a great deal with China. We’re very happy with it,” said Mr. Trump. Markets though were guarded in their response, awaiting fuller, concrete details of the agreement and remained wary of another flare-up.
In Asia-Pacific, MSCI’s broadest index tracking stocks in the region excluding Japan slipped 0.2%, after hitting a three-year high on Wednesday, while Japan’s Nikkei slipped 0.5%. Chinese and Hong Kong stocks were also taking a pause after touching multi-week highs in the previous session.
Mr. Trump’s erratic tariff policies have roiled global markets this year, prompting hordes of investors to exit US assets, especially the dollar, as they worried about rising prices and slowing economic growth.
Meanwhile, investors could also react to developments in the impeachment complaint against Philippine Vice-President Sara Duterte-Carpio, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said. “Local political noise could also be a factor, though the impeachment moves versus the vice-president could be viewed as uncertain after the recent developments.”
Mr. Ricafort put PSEi’s minor support at 6,290-6,300 and resistance at 6,500. — R.M.D. Ochave with Reuters
