US 2016 ELECTIONS

Debate lifts markets; PH bucks trend

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HONG KONG: Financial markets Tuesday cheered Hillary Clinton’s performance in the first US presidential debate, with stocks and high-risk currencies staging a “relief rally” as investors saw her as victor over Republican rival Donald Trump.

Key Asian bourses got a bounce as a confident Clinton bested her rival in the 90-minute showdown, some reversing earlier declines.

Tokyo ended 0.8 percent up, a dramatic volte-face from its 0.9 percent drop at the open, while Sydney also trimmed early losses.

Hong Kong opened 0.5 percent higher but jumped in the afternoon to close more than one percent higher. Shanghai was up 0.6 percent by the close after being flat most of the day.


Seoul, Bangkok and Singapore also gained.

But the Philippines bucked the trend, with the bellwether Philippine Stock Exchange index or PSEi sliding nearly 1 percent or 75.12 points to close at 7,557.34, reflecting declines in Western markets ahead of the debate.

The All Shares index and all subindices went south. The largest declines came from Mining and Oil, which went down 2.44 percent, and Services which closed 1.68 percent lower. Financial stocks closed lower by 1.09 percent while Holding Firms slid by 0.95 percent.

Property shares declined by 0.71 percent, while Industrials went down by 0.61 percent at the market close.
Ed Francisco, BDO Capital president, told reporters negative sentiment over the US debate prevailed in morning trade.

Francisco said the market had concerns a Donald Trump win in the November elections would affect the Philippines’ thriving business process outsourcing sector.

This was echoed by RCBC Research Analyst Anton Alfonso, who said: “We expect declines on Wall Street last night to spill over to the local bourse today as investors abroad cautiously observe the US presidential debate.”

A total of 1.63 billion shares worth P7.76 billion were traded on Tuesday, including P18 million in net foreign selling. Losers crowded against gainers, 147 to 51, while 40 issues were unchanged.

Michael McCarthy, chief market strategist at CMC Markets, told Bloomberg News Clinton’s performance calmed market players.

“US futures have moved ahead as the debate unraveled, and I think that is one of the factors” for Asian markets erasing losses, he said.

On foreign exchange markets, the safe-haven yen dropped, while emerging-market and other currencies surged as traders moved back into riskier assets.

The Mexican peso rebounded off a record low, rocketing over two percent to 19.4391 against the US dollar.

The unit had slumped before the debate as the prospect of a Trump presidency fanned concerns over the neighbors’ political and economic ties.

“Given that the Mexican peso has been the most sensitive currency to the US election outcome, it took center stage as the market reacted to the US presidential debate,” Khoon Goh, the head of regional research at Australia & New Zealand Banking Group in Singapore, told Bloomberg.

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