Stock Market

Last-minute bargain hunting boosts main index

Posted on December 15, 2015

AFTER falling by more than 100 points intraday following Wall Street’s decline, the main index firmed up at closing to end higher on last-minute buying of select stocks.

The Philippine Stock Exchange index (PSEi) recovered 10.98 points or 0.16% to end Monday trading at 6,745.99.

The wider all-shares index, however, slipped by 0.74 point or 0.01% to settle at 3,894.12 yesterday.

“The market was down by almost 124 points following what happened in the US, with the reason still being the interest rate hike,” Alexander Adrian O. Tiu of AB Capital Securities, Inc. said in a telephone interview.

Wall Street fell on Friday, with the Dow Jones industrial average index erasing 309.54 points or 1.76% to close at 17,265.21; the Standard & Poor’s 500 index dropping 39.86 points or 1.94% to 2,012.37, and the tech-heavy Nasdaq index declining by 111.71 points or 2.21% to 4,933.47.

“There’s also the volatility in oil given that the OPEC (Organization of the Petroleum Exporting Countries) did not come to a conclusion regarding their production output,” the analyst added.

Joylin F. Telagen, equity research analyst at IB Gimenez Securities, Inc., said in a mobile phone message: “I’ve seen support at 6,600 level, equivalent of 18xPE (price-to-earnings ratio) of 2016 expected earnings... And with last-minute bargain hunting at the close, I think investors are starting to get back in the market.”

Two of the six sectoral subindices posted decent gains, with property jumping by 30.43 points or 1.04% to 2,949.42 and holding firms adding 38.91 points or 0.61% to 6,359.13.

AB Capital’s Mr. Tiu said the bellwether index was lifted by last-minute buying of shares in SM Prime Holdings, Inc., which jumped by 8.25% or P1.75 to end at P22.95 each; and GT Capital Holdings, Inc., after it gained P76 or 6.21% to P1,299.

In contrast, the mining and oil counter plunged by 153.98 points or 1.45% to 10,404.78; services dropped 17.74 points or 1.18% to 1,481.26; industrial lost 54.01 points or 0.50% to 10,658.28; and financials shed 5.77 points or 0.38% to close at 1,500.77.

Value turnover remained low at P4.97 billion after 1.37 billion shares changed hands, from the P6.72 billion recorded the preceding session.

Net foreign selling increased to P949.85 million from the P581.86 million seen last Friday.

Losers outpaced gainers, 121-43, while 46 issues did not move.

“Should the Federal Reserve hike interest rates in its meeting, I think the market is already expecting it and is more concerned on the normalization path the Fed will take. At this level, I think the risk reward is higher over medium term,” IB Gimenez’s Ms. Telagen said.

Meanwhile, AB Capital’s Mr. Tiu said investors should brace for more volatility in the days ahead, noting that the bellwether index’s 6,600 support level remains intact. -- Daphne J. Magturo