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MANILA, Philippines (UPDATED) – Philippine stocks rallied on the last day of the trading week after posting on Thursday, June 13, the steepest one-day fall since the stock crash in 2008
On Friday, June 14, share prices recovered with a rally. The benchmark Philippine Stock Exchange index (PSEi) climbed to 6,242.26 — up 2.1% or 128.18 points — as investors hunted for bargains.
Friday marked the only recovery of Philippine stocks for the past week.
The consecutive losses the past days almost wiped out the gains for this year. Thursday’s close at 6,114.08 was the lowest since January 23, when the PSEi settled at 6,092.53.
The fall, according to analysts, was due to external factors, mainly concerns over moves of the US Fed and ECB to adjust their monetary policies. This may result in higher interest rates that, in turn, attract the pull out of funds from the equity markets as fund managers reallocate their portfolio to accommodate more bonds.
The broader all-share index managed a slight recovery, increasing by 62.89 points or 1.64% to 3,897.76.
All sectoral indices also ended strongly, led by the services sector gaining 2.4%.
Gainers outnumbered losers, 111 to 50, while 41 stocks remained unchanged.
A total of 1.003 million shares worth P10.86 billion were traded.
Markets recover
Other stock market indices are showing recoveries as well.
Tokyo shares rallied 1.94%, rebounding from a massive sell-off in the previous session stoked by a surging yen and jitters over an end to central bank stimulus.
The benchmark Nikkei 225 index closed up 241.14 points to 12,686.52, although gains were pared after jumping about 3.5% in earlier trade. The index lost 6.35% on Thursday.
The Topix index of all first-section shares closed up 1.18%, or 12.28 points, at 1,056.45.
Thursday’s precipitous drop was largely attributed to investor worries over an end to stimulus, particularly the US Federal Reserve’s huge monetary easing, which has been credited with propping up global equity markets.
The Nikkei had been up about 80% from mid-November levels, peaking around 15,600 in late May as foreign investors jumped into the market on the back of a plan by Japanese Prime Minister Shinzo Abe to stoke the world’s 3rd largest economy.
Dubbed Abenomics, the policy prescription of big government spending and aggressive central bank easing pushed down the yen and sent stocks soaring.
Doubts have begun to emerge over the plan, however, with weeks of wild volatility on Japan’s premier bourse shaving about 20% off one of the world’s best-performing indexes. The Nikkei is still more than 40% above its levels in mid-November.
These gains followed a rally on Wall Street, helped by upbeat US retail and weekly jobs data.
The Dow Jones Industrial Average closed up 1.21% at 15,176.08 on Thursday, shrugging off the dive in Tokyo.
On currency markets, the greenback see-sawed around the 95 yen level for most of Friday’s session, weakening from 95.31 late Thursday in New York, but stronger than 94.64 yen seen in Tokyo Thursday.
A cheaper yen benefits Japanese exporters by making them more competitive overseas and tends to push up Tokyo stocks. – Rappler.com and Agence France-Presse
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