MANILA – Philippine shares were higher in early trading Friday as better than expected corporate earnings boosted investor sentiment.
The Philippine Stock Exchange Index was up 0.22 percent to 8,536.16, bucking the downtrend in the rest of Asia due to uncertainty over tax reform in the US.
Third quarter results so far had been “slightly above average,” helping keep the main index at the 8,500-point level, Regina capital analyst Paul Angelo told ANC’s Market Edge with Cathy Yang.
Markets in Asia were down after US Senate Republicans unveiled a plan that differed from the House of Representatives’ version in several key areas, including a delay in the timing of a corporate tax cut.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.1 percent while Japan’s Nikkei lost 1.0 percent.
MSCI’s all-country equity index posted its first daily loss in more than 2 weeks on Thursday, ending its longest daily winning streak since 2003.
On Wall Street, the S&P 500 lost 0.38 percent while the Nasdaq Composite dropped 0.58 percent.
US Republican Senators said they wanted to slash the corporate tax rate in 2019, later than the House’s proposed schedule of 2018, complicating a push for the biggest overhaul of US tax law since the 1980s.
The House was set to vote on its measure next week but the Senate’s timetable was less clear, with a formal bill yet to be drafted in that chamber, where Republicans have a much smaller majority and a narrower path to winning approval for any legislation, let alone one as contentious as a tax package.
“Things look fluid, including on when the tax cut deal will be reached,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.
“I would say a compromise will be reached in the end, and we don’t need to be too pessimistic. But if they indeed decide to delay the tax cut by a year, there is likely to be some disappointment,” he said.
The US dollar also faced the head wind, with the euro firming to $1.1644, extending its rebound from $1.1553, its 3 1/2-month low touched on Tuesday.
The dollar slipped to 113.47 yen, from Monday’s high of 114.735, its highest level since March.
The 10-year US Treasuries yield also briefly fell, though it came back to 2.340 percent, pressured by this week’s government and corporate debt supply.
US junk bonds were sold off, with the price of major junk bond ETF plunging to its lowest level since March.
Oil prices held firm, on course to log their fifth straight week of gains, on hopes of supply cuts by major exporters as well as continuing concern about political developments in Saudi Arabia.
A spokesman for Saudi Arabia’s energy ministry said the kingdom plans to cut crude exports by 120,000 barrels per day in December from November.
US light crude futures traded at $57.04, down 0.2 percent in early Asian trade but still just shy of this week’s more than two-year high of $57.69 a barrel. — with reports from Reuters
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