The stock market jumped Friday after the surprise cut in interest rates announced by the Bangko Sentral ng Pilipinas and over a virus vaccine that could spur global economic recovery and bring back a semblance of normality in the new year.The Philippine Stock Exchange Index soared 172.17 points, or 2.5 percent, to a near nine-month high of 7,169.79 points on a value turnover of P10.9 billion. Thursday’s close was near the 7,187.44 points that the benchmark index reached on Feb. 24 this year. Gainers overwhelmed losers, 159 to 66, with 45 issues unchanged.The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas, on Thursday reduced the overnight borrowing rate by 25 basis points to a record-low 2 percent as support measure to boost the economy amid the lingering global health crisis.GT Capital Holdings Inc. of the Ty Group advanced 7.7 percent to P603, while AC Energy Philippines Inc. of the Ayala Group surged 12 percent to P5.80.BDO Unibank Inc., the biggest lender in terms of assets, advanced 5.8 percent to P104.70, while parent SM Investments Corp. of the Sy Group rose 4.5 percent to P1,050.The rest of Asian markets mostly climbed Friday but traders trod uneasily as they were caught between long-term optimism over a virus vaccine and the immediate horror of surging virus infections and deaths across the world.Hong Kong, Shanghai, Seoul, Singapore, Mumbai and Bangkok were all up. But Tokyo, Sydney, Wellington, Jakarta and Taipei slipped.Trading floors were also battling a similar problem with Washington as the Treasury and Federal Reserve knocked heads over extending lending measures, just as lawmakers prepared to restart stimulus talks.Breakthroughs on a drug to fight coronavirus, along with Joe Biden’s election win, have fired a rally in global equities this month as investors bet that life can begin to get back to a semblance of normality in the new year.
But the wind has been taken out of their sails by a stream of desperate figures showing the disease running wild, setting new records in the United States and Europe while spiking in several other countries.And as the northern hemisphere heads into winter, there are fears things will only get worse, with governments including in France and England already forced to impose fresh lockdowns.Major US cities such as New York have put strict containment measures in place and on Thursday California announced a curfew across the vast majority of the state.Meanwhile, Tokyo has raised its virus alert to the highest level.“There’s the push-pull of short-term versus long-term and that’s what investors are looking at right now,” Chris Gaffney, at TIAA Bank, said. “There are some very serious risks in the short term, especially with the lockdowns.”Investors are also keeping an eye on Washington, where talks are due to resume on a new, desperately needed rescue package for the world’s top economy.While Republicans do not look likely to back down on their demands for a small stimulus and Democrats are calling for a multi-trillion-dollar deal, observers say news that they are back at the table is positive. With AFP