The Philippine stock market extended its winning streak Thursday after US President Donald Trump announced a 90-day suspension of tariff adjustments across countries except China.
The 30-company Philippine Stock Exchange index surged 71.48 points, or 1.19 percent, to close at 6,077.82, while the broader all-shares index added 40.14 points, or 1.12 percent, to settle at 3,622.94,
“The market closed higher on the back of a relief rally in reaction to Trump’s decision to temporarily pause most reciprocal tariffs, including those on the Philippines,” China Bank Capital managing director Juan Paolo Colet said.
“The benchmark index opened strongly in the morning, but some of those gains melted away over the trading session as investors took profits and trimmed positions to hedge against the escalating trade war between the US and China,” he said.
Colet said market optimism was partly sustained on expectations that the Bangko Sentral ng Pilipinas would cut its policy rate.
Trump suspended the implementation of reciprocal tariffs after global markets declined due to fears of escalating trade war and global recession.
All sectors ended in positive territory, with mining and oil index registering the biggest increase of 6.45 percent, as gold prices continue to go up.
Holding firms advanced by 3.77 percent, and industrial by 1.27 percent.
Value turnover reached P11.12 billion, with 129 advancers, 72 decliners and 46 unchanged names.
Ayala Corp. climbed 3.57 percent to P580. International Container Terminal Services Inc. declined 2.3 percent.
Asian stocks also rocketed Thursday as a relief rally spread through markets after Donald Trump paused crippling tariffs on US partners, with Chinese investors even brushing off his decision to ramp up duties on Beijing to 125 percent.
The across-the-board gains tracked a blistering performance on Wall Street as the US president said he would delay for 90 days measures announced last week that set off a firestorm on trading floors and sparked global recession fears.
Trump said he would keep in place a basic levy of 10 percent on dozens of countries but upped the ante in his brutal trade war with superpower rival China by hitting it even harder after it retaliated.
China’s own 84 percent retaliatory measures kicked in at 0401 GMT Thursday, later saying that the United States “goes against the whole world” with the measures and called on Washington to “meet halfway”.
Trump made the decision to delay because investors were “jumping a little bit out of line”, he said, after markets collapsed and US Treasuries — considered the safest option in times of crisis — showed signs of cracking.
People “were getting yippy, a little bit afraid”, he added, referring to a term in sports to describe a loss of nerves.
The extra tariffs on Beijing, however, were “based on the lack of respect that China has shown to the world’s markets”, Trump said.
The president denied he had made a U-turn, telling reporters that “you have to be flexible”.
And his top trade advisor Peter Navarro said: “This will go down in American history as the greatest trade negotiating day we have ever had.
“We’re in a beautiful position for the next 90 days, we’ve got over 75 countries that are going to come in and negotiate with us and what they’re going to have to do, without fail, is they’re going to have to lower their non-tariff barriers.”
Trump’s shock announcement on his Truth Social network sparked a buying frenzy as Asian and European investors chased beaten-down stocks.
“Asia markets are flipping the switch — from fear to euphoria — as Trump throws a 90-day lifeline, pausing the reciprocal tariff barrage,” said Stephen Innes at SPI Asset Management.
“We just witnessed one of the all-time bouncebacks — and now, we look for Asia investors, much like their North American counterparts, to step in and buy the ‘yips’.”
Tokyo’s Nikkei surged more than nine percent, while Taipei’s 9.3 percent gain was its best rise on record — after Monday’s 9.7 percent drop represented its worst fall.
‘Fear to euphoria’
Hong Kong rallied more than two percent — a third day of gains after collapsing more than 13 percent on Monday in its worst day since 1997 during the Asian financial crisis. Shanghai gained more than one percent.
The two markets have been given extra support by optimism that China will unveil fresh stimulus to support its economy.
Seoul, Singapore, Jakarta, Sydney, Saigon and Bangkok climbed between four and 6.6 percent. Manila and Wellington were also well in the positive territory.
In early trade, Paris and Frankfurt cruised more than six percent higher and London rallied more than four percent.
Tech firms were the standout performers, with Sony, Sharp, Panasonic and SoftBank chalking up double-digit gains, while airlines, car makers and casinos also enjoyed strong buying.
Gold surged almost three percent around $3,120 — around $50 short of its record touched last month — thanks to the weaker dollar and as the uncertainty saw investors rush into the safe haven.
Chihiro Ota, at SMBC Nikko Securities, said: “What happens now? If the US takes hardline stance (in negotiations), then the market would be disappointed. If it turns out that they can engage in talks, then it may create a room for (an upswing).”
US Treasury yields also edged down, after a successful auction of $38 billion in notes, said Briefing.com.
That eased pressure on the bond market, which had fanned worries investors were losing confidence in the United States.
However, observers warn the China-US standoff could mark a step towards a disengagement between the world’s top two economies.
“The escalation of the trade war between the US and China suggests that a full trade decoupling is increasingly likely,” said Mali Chivakul, emerging markets economist at J. Safra Sarasin bank.
“Even if we may see a de-escalation later, a decoupling could still be the result.”
Trump’s trade war is also causing a headache for the Federal Reserve as it weighs cutting interest rates to protect the economy or holding them to ward off the inflation many say tariffs will fuel.
Minutes from its March meeting, released Wednesday, showed members felt they “may face difficult trade-offs if inflation proved to be more persistent while the outlook for growth and employment weakened”.
Oil prices dropped after bouncing more than four percent Wednesday, though they remain under pressure amid concerns about the global economy and its impact on demand. With AFP
