MANILA - Philippine shares hit their highest level in over three months on Wednesday after a drop in new COVID-19 infections.
Manila's benchmark index was set to extend gains for a third consecutive day, rising 2.7 percent to its highest since July 9, after the Philippines reported its lowest daily increase in infections in four weeks.
Sentiment has improved recently for Philippine stocks after the passage of the 2021 budget aimed at underpinning an economic recovery, and the relaxation of further coronavirus restrictions in Manila.
"While recent gains have been impressive, I think there is still a long way to go in order for the benchmark stock index to recover back to pre-pandemic levels," said Daniel Dubrovsky, analyst at IG.
"The challenge that Philippine equities face as a whole is that about 40 percent of the benchmark is comprised of industrial companies...which really need the support of a strong rebound in global growth. While it is hard to say which sector could outperform, monetary policy conditions seem to be supportive of the real estate one."
Stock markets and currencies across the rest of the region traded higher as growing optimism that U.S. lawmakers are nearing a deal on a stimulus package helped draw money into riskier Asian assets, sending the dollar to a one-month low.