Stock market climbs; DITO and AC Energy lead advances


Stocks rallied Tuesday in step with the rest of Asia, fueled by the overarching theme of vaccine rollouts, slowing infections and the easing of lockdowns, as well as optimism President Joe Biden will soon be able to sign off on a vast US stimulus package.

The Philippine Stock Exchange Index advanced 84.85 points, or 1.2 percent, to 7,044.06 on a value turnover of P18.2 billion. Gainers beat losers, 122 to 89, with 54 issues unchanged.

DITO CME Holdings Corp., the third major mobile phone company, rose 3.3 percent to P17.98, while SM Prime Holdings Corp. of the Sy Group advanced 3.4 percent to P38.

AC Energy Corp., a unit of Ayala Corp., climbed 2.6 percent to P7.79, while Megaworld Corp., the biggest lessor of office spaces, added 2.4 percent to P3.90.

Oil, meanwhile, held on to gains around 13-month highs as a severe cold snap in Texas combined with expectations of a surge in demand in line with the reopening of economies.

With Britain and the United States leading the way in rolling out vaccines at the same time as they see a sharp slowdown in new cases and deaths, there are growing calls for governments to lift strict containment measures and get life back to a semblance of normal.

The United States on Sunday reported its lowest daily infection number since October, as Britain easily hit a key target for immunizing its highest-risk people, while the European Union—which is struggling with its vaccine program—has ramped up plans to deliver more jabs.

“Rapid vaccine uptake means consensus is aligned to a surge in economic activity and strong profit recovery,” said Axi strategist Stephen Innes.

He added that with the Federal Reserve’s ultra-loose monetary policies and Biden’s stimulus on the way, “it certainly feels like the path of least resistance remains higher, as calls grow more vocal for an increase in the pace of reopening and the positive implications that would have for some areas of the market.”

While Biden’s spending package is widely expected to pass through the Democrat-controlled Congress, analysts have warned it might not be as big as the $1.9. trillion he proposed, though it is still expected to be north of a trillion.

Hong Kong jumped 1.9 percent to levels last seen in June 2018 as traders returned from an extended holiday weekend, while Tokyo was also more than one percent higher a day after breaking 30,000 points for the first time in three decades.

Wellington rebounded from a steep loss after New Zealand’s government said there had been no reports of community transmission of the virus in Auckland, with the city in lockdown following the discovery of the UK strain.

Sydney, Seoul, Singapore, Mumbai, Bangkok and Jakarta were also higher. Shanghai and Taipei were closed for holidays.

David Kelly at JP Morgan Asset Management said in a note: “A combination of a receding pandemic and extra fiscal stimulus should lead to a very rapid acceleration in economic activity over the course of 2021.

“The most important unknown is the extent to which a rapid recovery, fueled by significant and broad fiscal stimulus, could boost inflation via temporary excess demand for labour, goods and services.” With AFP

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