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Stocks rally on bargain hunting ahead of data

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PSE bells
PHILSTAR/KRIZ JOHN ROSALES

LOCAL STOCKS jumped to their fourth straight day of gains on Wednesday as investors continued to search for bargains given the main index’s historically low valuation.

The benchmark Philippine Stock Exchange index (PSEi) climbed 1.11% or 81.08 points to 7,348.42. The broader all-shares index likewise rallied 1% or 44.21 points to 4,454.04.

“I think it’s primarily driven by broad bargain hunting since the index is already trading at the low end of its historical valuation range. Investors might have also positioned in anticipation of a positive inflation release [today],” China Bank Securities Corp. Research Director Garie G. Ouano said in a text message.

This is the first time the PSEi managed to stay in positive territory for four consecutive sessions since February, when the market was trading around the 8,600 level.

“Potential inflation surprises notwithstanding, I do think the rally is sustainable since the index is cheap already and a lot of the risks previously seen are short-term in nature,” Mr. Ouano said.

Investors are also waiting for inflation figures to be released Thursday, July 5. The central bank projected inflation to have accelerated by 4.3-5.1% last June, lower than the target range of 4.6-5.4% in May. Meanwhile, the Department of Finance said inflation likely reached a fresh five-year high of 4.9%.

“Many analysts are also still a bit cautious as well, awaiting the latest inflation report, which comes out (on Thursday). A lot are pointing that this would hit much higher than the 4.6% recorded for May,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile message.

The mining and oil sector was the lone sub-index that suffered a loss Wednesday, July 4, giving up 0.43% or 42.18 points to 9,669.62.

Services led advancers as the counter soared 1.92% or 26.83 points to 1,418.27, followed by property with an increase of 1.74% or 62.24 points to 3,625.24. Holding firms went up 0.99% or 71.59 points to 7,252.76; financials rose 0.61% or 10.98 points to 1,798.59, while industrials climbed 0.17% or 18.40 points to 10,465.87.

Some 590.89 million issues switched hands, resulting in a turnover of P4.94 billion, slightly higher than the P4.78-billion turnover on Tuesday.

The market saw an equal number of advancers and decliners at 100 stocks each, while 56 names ended flat.

Investors continued to pick up select large cap stocks. Shares in SM Investments Corp. were the most actively traded resulting in a 1.09% increase to P925 each. Ayala Corp. followed with a rise of 1.42% to P928 apiece, while SM Prime Holdings, Inc.’s shares gained 2.78% to P37 each.

Meanwhile, Wall Street indices closed lower Wednesday, July 4 on the back of thin trading ahead of the Fourth of July holiday. The Dow Jones Industrial Average went down 0.54% or 132.36 points to 24,174.82, while the Nasdaq Composite index slowed 0.86% to 7,502.67. The S&P 500 index also closed 0.49% lower to 2,713.22. — Arra B. Francia