PSEi returns to 8,700 level as rate hike fears ease

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A trader in the Philippine Stock Exchange looks at the electronic board in Manila’s financial district on July 6, 2015. -- AFP

SHARES jumped on Monday as positive corporate earnings alongside dwindling fears for a faster rate hike by the US Federal Reserve fuelled optimism.

The 30-member Philippine Stock Exchange (PSEi) index went up 1.13% or 97.78 points to 8,710.22, while the broader all-shares index climbed 0.93% or 47.60 points to 5,123.20.

“It was a recovery in the market since we were absent last Friday. And also fears of…the movement of the rate increase by the Fed was allayed due to the fact that retail sales figure was not that strong enough. Thus this provided the market to be more optimistic of the continued growth,” Diversified Securities, Inc. equities trader Aniceto K. Pangan said in a phone interview.

Mr. Pangan added that corporate earnings have been positive so far, noting the reports released by property giants SM Prime Holdings, Inc. (SM Prime) and Ayala Land, Inc. (ALI).

SM Prime disclosed on Monday that recurring profit grew 16% to P27.6 billion, while ALI last week said that net income attributable to the parent climbed 21% to P25.3 billion in 2017.

“This means that both the property and consumer sector are positive. There’s relatively sustained growth in the market,” Mr. Pangan said.

All sectors ended on positive territory, led by the financials sub-index which gained 2.55% or 56.57 points to 2,266.86. Mining and oil followed with an increase of 1.72% or 201.85 points to 11,908.20. Property inched up 1.37% or 53.44 points to 3,938.61; services added 1.34% or 22.97 points to 1,728.44; industrials picked up 0.65% or 74.98 points to 11,473.60; while holding firms rose 0.38% or 33.56 points to 8,830.61.

Foreign investors turned buyers, snapping a 15-day selling streak with net inflows of P44.93 million on Monday, against net sales of P373.42 million last Thursday.

A total of 7.35 billion issues switched hands for a value turnover of P9.7 billion, lower than the P10.7-billion turnover in the previous session.

Advancers outpaced decliners, 141 to 65, while 44 names were unchanged.

The market moved in pace with Asian markets, which ended mostly on a positive note.

Analysts expect the upswing recorded on Monday to continue for the rest of the week, as long as the Fed would keep its rate hikes steady in the coming months.

“We expect some upside this week as long as it breaks and holds the 50-day average. This range trade will not last for long. Key support levels are expected to be tested within the month,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

Other leads for the week include the release of minutes from the Federal Open Market Committee’s Jan. 30-31 meeting, which could provide more hints on the US central bank’s future moves, as well as the release of local balance of payments data scheduled yesterday. — Arra B. Francia