Stock market surges on Dow Jones performance

The local stock market soared yesterday, boosted largely by a record-breaking performance of the New York Stock Exchange, on hopes that concerted rescue efforts by governments will shore up the world’s battered financial system.

The Philippine Stock Exchange (PSE) 30-company composite index staged a strong 154.90-point rally to settle at 2,273.65 points as investors cheered reports that governments will pour cash into struggling banks and restore confidence in the global financial system.

It was the index’s biggest point gain since August 21, 2007 when the main composite index powered a 283.18-point rally.

There were 101 gainers, 16 losers and 26 unchanged. Turnover reached 1.87 billion shares worth P3.596 billion.

Across Asia, markets also rallied, led by Japan’s Nikkei which posted its biggest gain ever, skyrocketting more than 14 percent or 1,171.14 points to settle 9,447.57 points.

“The markets got a boost of confidence from the actions in the United States and Europe with the government’s plan to purchase shares of banks,” said Jose Vistan of AB Capital Securities Inc.

“The ones being pressured are the banking issues so with the governments’ commitment to come in and support banking shares, this provided some relief and confidence for investors.” he said.

Vistan said there could be problems in the long-term but added that “for now the rally could last for more than week.”

The US Treasury announced on Monday it was gearing up to buy stakes in a “broad array”of financial firms and would hold a meeting later in the day with leading bankers and Federal Reserve to discuss a financial market stabilization initiative.

The Dow Jones Industrial Average jumped 936.42 points or 11.08 percent to 9,387.61, breaking an eight-session losing streak.

At the Philippine Dealing System (PDS), the peso gained two centavos to close at 47.240 to the   dollar as investors snap up local stocks following moves by governments in the United States and Europe to bail out banks.

 “The joint effort of central banks prompts risk appetite, leading most emerging-market currencies to appreciate against the dollar,” says a Manila-based trader.

The US government agreed on Monday to take $25 billion stakes in several big banks. That follows pledges by European countries of more than 1 trillion euros to bolster their own banks.

Philippine Long Distance Telephone Co. (PLDT) gained 7.76 percent to P2,430.

Ayala Corp. rose 11.2 percent to P262.50 while Ayala Land Inc. rose 9.7 percent to P7.90.

San Miguel Corp. saw its A shares rise 3.09 percent to P50 while its B shares gained 5.2 percent to P50.50. — AP