Stocks end higher on US-Mexico trade deal

STOCKS firmed on Tuesday, tracking their US counterparts, as investors welcomed a new trade agreement between Washington and Mexico.

The Philippine Stock Exchange index ( PSEi) rose 78.14 points or

1.0 percent to finish at 7,844.61 while the broader All Shares added 30.31 points or 0.64 percent to 4,759.13.

“The optimism that spread across markets yesterday from the preliminary agreement between the US and Mexico on NAFTA ( North American Free Trade Agreement) certainly set the tone for the local benchmark’s opening, while the return of domestic funds and investors buoyed trading throughout,” Regina Capital Development Corp. analyst Rens Cruz said.

US President Donald Trump said Monday Washington and Mexico reached a new bilateral trade deal, revising key portions of the 24- year old NAFTA.

Trump called the new deal the US- Mexico Trade Agreement, which is set to be finalized in the coming days.

Wall Street rose on the news. The Dow Jones ended up 1.01 percent, the S& P 500 rose 0.77 percent, and Nasdaq added 0.91 percent.

“Participants are also taking into account the reported slowdown in net foreign selling the week prior, indicating that the market sell- down might have found some respite,” Cruz added.

But with few positive catalysts on the domestic front, Cruz said local shares are unlikely to sustain the rally in the next trading days.

Papa Securities Corp. trader Gabriel Jose Perez echoed Cruz’s view, saying optimism out of the US markets overnight propelled the local market higher aided by net foreign buying.

Foreign funds bought P4.43 billion worth of shares and sold P3.96 billion, for a net foreign buying of P474.4 million.

“Moving forward, we anticipate developments from US markets tonight which might have a hand again in how our index fares tomorrow. Look out as well for foreign flows as these have recently dictated the PSEi’s movement,” Perez said.

In Manila, all sectors registered gains except for services, which dipped 0.01 percent.

Volume turnover stood at 1.55 billion shares valued at P7.65 billion.

Gainers led losers, 112 to 94, while 38 issues were unchanged.