Progress on US-China trade talks spurs market recovery

MANILA, Philippines — The stock market recovered yesterday on positive news surrounding the US-China trade deal.

The benchmark Philippine Stock Exchange index (PSEi) rallied by 136.56 points, or 1.76 percent, to finish at 7,877.63.

Likewise, the broader All Shares index gained 63.32 points or 1.37 percent to end at 4,662.07.

All the other gauges also rallied yesterday with the property and service among the biggest gainers.

Total value turnover reached P7.5 billion. Market breadth was positive, 123 to 61 while 55 issues were left unchanged.

Luis Limlingan of Regina Capital gave this comment: “Philippine stocks jumped as the so-called phase one trade deal between the US and China has been agreed to in principle. The US and China are reported to have struck a preliminary trade deal, according to various press reports. A potential partial rollback of tariffs, while positive for sentiment, is unlikely to cause a meaningful tightening in spreads.”

On the local front, he said investors were also reacting when the central bank kept the key interest rates unchanged in Thursday’s meeting, citing the benign inflation environment and making the currency firm. The BSP maintained overnight borrowing, lending and deposit rates at 4.00, 4.50, and 3.50, respectively.

“Governor Diokno said the latest baseline forecasts indicated that future inflation path remained within the two percent to four percent range for 2020 and 2021,” he said.