MANILA - The Philippine benchmark index surged on Wednesday to return above the 6,300 mark on expectations that the US government shutdown will end soon and have a minimal impact on the world's biggest economy.
At the Philippine Stock Exchange, the bellwether index shot up 164.42 points or 2.65 percent to close at 6,362.26. All indices rallied by at least a percent led by the 3.09 percent advance of the holding firm counter.
Advancers outnumbered decliners, 99 to 46, while 40 issues were unchanged. A total of 1.3 billion stocks worth P8.23 billion changed hands.
Actively traded stocks were Universal Robina, Metrobank, Ayala Corp, PLDT and Alliance Global. Top gainers were Chemphil, TKC Steel and Bogo-Medellin, while the biggest losers were Maybank, A Brown and 2GO.
"There's some sort of relief in the Philippines after seeing the reaction of US markets overnight to the spending bill not being passed," said April Lee-Tan, head of research at COL Financial Group Inc.
"Given that in the US, the market did not react negatively, the perception is that this will not be a problem or the shutdown will not take a long time," she added.
Overnight, the Dow Jones industrial Average jumped 62.03 points, or 0.4 percent, to 15,191.70 despite the failure of US lawmakers to reach an agreement on a budget before the October 1 deadline. This triggered a government shutdown that left up to a million US federal employees on unpaid leave.
"Now that the US government has shut down, attention moves to the issue of raising the debt ceiling from $17 trillion," said Jun Calaycay of Accord Capital Equities Corporation.
"The alternative -- should the wrangling and finger-pointing continue through October 17 -- is more fear-inducing. The US will default on its loans and it may yet lose another notch off its credit rating," he said.
Earlier today, Manila-based Asian Development Bank hiked its Philippine economic growth forecast to seven percent from the original six percent estimate, while cutting its growth projection for other emerging Asian countries.
"In a way it's not surprising but any good news helps at this point," Tan said.
source: interaksyon.com
