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Market extends rally; SM Prime, BDO advance

The stock market extended its gains for a fifth day Thursday ahead of a crucial US interest rate decision.

The Philippine Stock Exchange Index rose 30.07 points, 0.4 percent, to 7,123.99 on a value turnover of P6.8 billion. Gainers overwhelmed losers, 114 to 62, with 37 issues unchanged.

SM Prime Holdings Inc. of retail tycoon Henry Sy Sr. climbed 4.5 percent to P21, while BDO Unibank Inc., the largest lender in terms of assets, added 1.8 percent to P101.60.

GT Capital Holdings Inc. of tycoon George Ty gained 1.2 percent to P1,288, while Energy Development Corp., the biggest steam energy producer, advanced 4.2 percent to P6.15.

Asian traders remained broadly optimistic leading up to the US Fed meeting with most stock markets and higher risk assets extending recent gains as part of another global rally.

The Federal Reserve’s policy meeting has been the key focus for global investors for weeks as bank policymakers have to weigh a healthy US recovery with a slowdown in overseas economies as well as the recent turmoil unleashed by fears over China.

However, China’s crisis and its government’s ability to control a sharp slowdown in the world’s number two economy continue to drag on sentiment, with Shanghai tumbling again.

“It’s hard to recall an event given so much attention from market players, the implications are far reaching and history provides absolutely no guide,” Chris Weston, chief markets strategist in Melbourne at IG Ltd., said referring to the Fed decision.

An upbeat mood across global exchanges has seen shares rise for most of this week, with US and European dealers enjoying two days of rallies.

In New York the Dow, S&P 500 and Nasdaq all tacked on healthy gains, while London and Paris were more than one percent higher.

On Thursday Tokyo ended 1.43 percent higher while Sydney tacked on almost one percent. Seoul, Wellington and Taipei also ended strongly.

However, Shanghai closed down 2.10 percent—it surged almost five percent Wednesday after losing around six percent in the previous two sessions—and Hong Kong finished 0.51 percent lower in late trade.

Shanghai surged more than 150 percent in a year before hitting a June 12, since when it has plunged about 40 percent on fears about high prices and the state of the Chinese economy.

The problem was exacerbated last month when Beijing devalued the yuan currency, raising questions about authorities’ grip on the crisis and roiling world markets—China is the main driver of global growth.

The country’s leaders have tried to reassure investors by buying huge swathes of stocks--leading to recent big jumps—but analysts question are being raised on the limits of the policy’s effectiveness. With AFP

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