Stock Market

By Keith Richard D. Mariano,

PSEi extends gains on positive market sentiment

Posted on January 10, 2017

THE LOCAL MARKET extended its gains into the second week of this year’s trading, as investors remain optimistic about the global economy’s direction despite mixed signals from the United States and China.

The Philippine Stock Exchange index (PSEi) advanced 28.14 points or 0.38% to 7,276.34 on Monday, surviving a volatile session that witnessed the benchmark open at 7,255.18 and touch 7,210.80 before closing to its intraday high.

The broader all-shares index likewise continued to rise, gaining another 12.35 points or 0.28% to close at 4,366.15.

“I think investors are embracing the new normal,” Joylin F. Telagen, equity analyst at I.B. Gimenez Securities, Inc., said in a mobile phone message, citing the positive albeit weaker-than-expected jobs data from the US and the resolve of president-elect Donald J. Trump to bolster the economy.

Nonfarm payrolls in the US increased 156,000 last month, below the 178,000 forecast by the market, news service Reuters reported on Friday.

“However, a jump in wages pointed to sustained labor market momentum,” noted Luis A. Limlingan, head of business development at Regina Capital Development Corp., with the 2.90% annual increase in average hourly earnings being the biggest since June 2009.

Investor concerns over the continuous decline in China’s foreign-exchange reserves partly brought local stocks to a choppy ride during the session.

“As for Asia, China’s foreign-exchange reserves fell to their lowest level in nearly six years during December. The People’s Bank of China announced Saturday that the nation’s foreign-exchange reserves fell $41.08 billion month on month to $3.011 trillion, the lowest level since March 2011,” Mr. Limlingan said.

Still, the local market ended in the green, with 104 names advancing, 88 declining and 48 remaining unchanged.

Only the holding firms sector stayed in the negative territory with a 4.35-point or 0.05% decline to 7,396.84. The services sector, on the other hand, led other sub-indices during the session, climbing 26.62 points or 1.93% to 1,404.65.

Financials ascended by 6.49 points or 0.37% to 1,757.98; mining and oil by 36.77 points or 0.29% to 12,385.12; industrial by 12.70 points or 0.11% to 11,060.73; and property by 1.59 point or 0.04% to 3,281.19.

Value turnover, however, dropped to about P5.25 billion from P8.56 billion, with 5.69 billion issues exchanging hands. Foreign investors brought in P202.11 million more than what they pulled out from the market during the session.

“With the index nearing its resistance, we might see some profit taking in the near term at around 7200. But a breakthrough to 7,300 might welcome 7,500,” I.B. Gimenez’s Ms. Telagen noted.