Stocks climb as Trump pauses reciprocal tariffs

Philippine stocks climbed on Thursday as the United States suspended the implementation of most “reciprocal” tariffs it had imposed on its trading partners.

The benchmark Philippine Stock Exchange index (PSEi) rose by 1.19% or 71.48 points to close at 6,077.82, while the broader all shares index increased by 1.12% or 40.14 points to end at 3,622.94.

“The market closed higher on the back of a relief rally in reaction to President Donald J. Trump’s decision to temporarily pause most reciprocal tariffs, including those on the Philippines,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.

“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. Nonetheless, market optimism was partly sustained by traders placing bets that the Bangko Sentral ng Pilipinas (BSP) would cut its policy rate,” he added.

Mr. Trump said he would temporarily lower the hefty duties he had just imposed on dozens of countries while further ramping up pressure on China, sending global stocks rocketing higher, Reuters reported.

The turnabout on Wednesday came less than 24 hours after steep new tariffs kicked in on most trading partners.

A 10% blanket duty on almost all US imports will remain in effect, the White House said.

Meanwhile, the Monetary Board on Thursday cut benchmark interest rates by 25 basis points, the BSP announced at the stock market’s close. This brought the policy rate to 5.5%.

“The PSEi rose this Thursday, taking cues from Wall Street’s rally overnight. The local market continued with its run as investors appreciated Mr. Trump’s move to temporarily drop tariff rates for most of its trading partners with higher tariffs to 10% to give room for negotiations,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

Overnight, the Dow Jones Industrial Average surged by 7.87% or 2,962.86 points to 40,608.45; the S&P 500 went up by 9.52% or 474.13 points to 5,456.90; and the Nasdaq Composite climbed by 12.16% or 1,857.06 points to 17,124.97.

At home, all sectoral indices closed higher. Mining and oil surged by 6.44% or 561.79 points to 9,276.33; holding firms climbed by 3.76% or 184.15 points to 5,074.22; industrials went up by 1.27% or 107.55 points to 8,545.6; property increased by 1.08% or 23.50 points to 2,181.57; financials rose by 0.11% or 2.83 points to 2,373.37; and services inched up by 0.01% or 0.25 point to 1,916.63.

Value turnover surged to PHP 13.31 billion on Thursday with 951.3 million shares traded, from the PHP 6.42 billion with 1.22 billion issues exchanged on Tuesday.

Advancers outnumbered decliners, 129 versus 72, while 46 names were unchanged.

Net foreign selling went down to PHP 110.26 million on Thursday from PHP 427.75 million on Tuesday. — Revin Mikhael D. Ochave with Reuters