PSE index hits 26th record high, breaches 5,500

MANILA, Philippines – The main index of the Philippine Stock Exchange (PSE) re-wrote record high levels for the 26th time this 2012.

On Tuesday, November 20, the PSE composite index (PSEi), an indicator of investor interest, pierced the 5,500 level for the first time, eclipsing the previous high of 5,473.61 on November 6.

The PSEi inched up 51.03 points to close at 5,500.58.

It also hit a new intraday record high at 5,510, again beating the November 12 intraday all-time high of 5,473.61.

Analysts cited the upbeat sentiments on US housing data and high hopes that the US fiscal cliff issue will be resolved soon.

Asian markets were mixed on November 20 as confidence that US politicians will agree a deal to avert a fiscal cliff was offset by profit-taking following a recent strong rally.

The decision by Moody’s to downgrade French debt staunched a rise in the euro early on but it picked up in the afternoon, stoked by hopes that eurozone leaders will agree to hand Greece its latest batch of bailout cash.

Tokyo, which has risen about 5% in the past 3 sessions, ended the day 0.12% lower on profit-taking and after the Bank of Japan held off any new monetary easing measures following a policy meeting.

The Nikkei shed 10.56 points to 9,142.64.

Sydney finished 0.56%, or 24.3 points, higher at 4,385.7 while Seoul was up 0.64%, or 12.08 points, to close at 1,890.18.

Hong Kong fell 0.16%, or 33.78 points, to 21,228.28, while Shanghai eased 0.40%, or 8.06 points, to 2,008.92.

Wall Street provided a strong lead as markets opened for the first time since Republicans and Democrats on Friday pledged to work on a budget that would avoid the fiscal cliff of tax hikes and spending cuts due on January 1 that would tip the economy into recession.

Global shares have tumbled in recent weeks on fears the two parties would not find a compromise but the comments from Congressional leaders have soothed fears.

The Dow climbed 1.65%, the S&P 500 jumped 1.99% and the Nasdaq surged 2.21%.

The rally was also boosted by figures showing that existing home sales rose 2.1% in October from September and home builder confidence improved for a 7th straight month in November.

However, European woes continue to nag. On Monday it was France in the spotlight after Moody’s cut its gold-plated AAA credit grade by one notch to “Aa1” and maintained a negative outlook, meaning another downgrade was possible.

It cited the the country’s “disproportionately large” exposure to the troubled countries on Europe’s periphery. Fellow ratings agency Standard & Poor’s made a similar move in January.

In afternoon Asian trade the euro bought $1.2811 and 104.05 yen, compared with $1.2778 and $103.99 yen in New York late Monday.

However, the single currency was still slightly down from $1.2816 and 104.25 yen shortly before Moody’s made its announcement.

The dollar was trading at 81.21 yen in Tokyo, compared with 81.40 yen in New York.

The yen remains under pressure — which has sent the Nikkei surging in recent days — after the frontrunner to become Japan’s next prime minister in December said he would embark on an aggressive monetary easing policy to help the economy.

In the early afternoon the central Bank of Japan said it would hold off any fresh monetary easing — after two such moves in the past two months — while it also warned the economy faced an uncertain future.

It also kept interest rates on hold.

Investors had been buying the euro on a likely agreement between regional finance ministers to hand Athens the latest installment of cash it needs to avoid bankruptcy.

They will try Tuesday to reach a framework agreement at a meeting on Greece and heal a split with the International Monetary Fund over a key debt reduction target.

“We are headed for an agreement, but a partial one,” said a European diplomat who asked not to be named. Another source underscored the will to reach an agreement, but noted a finalized deal could take a few more days.

On oil markets prices eased. New York’s main contract, light sweet crude for delivery in January, was down 38 cents to $88.90 a barrel in the afternoon and Brent North Sea crude for January delivery fell 28 cents to $111.42.

Gold was at $1,733.80 by 0810 GMT compared with $1,723.10 late Monday. – Rappler and Agence France-Presse