Local equities bounced back on Monday, March 12, tracking the positive developments seen in global markets as fears on interest rate hikes started to ease.

The bellwether Philippine Stock Exchange index (PSEi) climbed 0.97% or 80.99 points to close at 8,453.50, back in the green after two days of losses last week. The broader all-shares index was likewise up by 0.62% or 31.19 points to close at 5,083.98.

“Today’s PSEi rebound is more of tracking the rise of regional and overseas markets that were buoyed by the possible easing of interest rates pressures in the U.S. Some bargain-hunting is also a factor given the overall market decline last week that have brought relative valuations down,” PCCI Securities Brokers Corp. Research Head Joseph James F. Lago said in an email.

The Dow Jones Industrial Average jumped 1.77% or 440.53 points to 25,335.74 last Friday. The S&P 500 index also added 1.74% or 47.60 points to 2,786.57, while the Nasdaq Composite index gained 1.79% or 132.87 points to 7,560.81.

Papa Securities Corp. Trader Gabriel F. Perez also attributed the market’s increase to the strength of US markets, which also prompted markets in the Asia Pacific region to rally.

Majority of local sectoral indices were in positive territory on Monday, financials leading the charge with a 1.5% increase or 32.76 points to 2,213.51. Property followed with a 1.17% uptick of 44.26 points to 3,818.33; industrial rose 0.67% or 76.71 points to 11,549.73; services also increased 0.67% or 11.81 points to 1,767.17; while holding firms added 0.59% or 49.18 points to 8,426.02.

Mining and oil was the lone sub-index that declined, dropping 0.66% or 76.27 points to close at 11,445.18.

A total of 8.62 billion issues switched hands, valued at P7.20 billion, higher than Friday’s value turnover of P6.58 billion. Decliners narrowly beat advancers, 109 to 106, while 44 issues remained unchanged.

Foreigners continued their selling streak on Monday, as net foreign outflows rose to P731.71 million, against net sales of P573.73 million last Friday.

First Gen Corp was among the most actively traded stock on Monday, after disclosing that its San Gabriel Plant is now contracted with the Manila Electric Company. Papa Securities’ Mr. Perez noted the stock had the highest net foreign buying at P30.8 million.

Sought for an outlook, PCCI Securities’ Mr. Lago said the market may continue trading up, but may still be affected by the faster inflation recorded on February which came in at 4.5%, based on 2006 prices.

“The PSEi will certainly attempt to move back above the 8,500 level but it might be dependent on how investors will come to grips with local inflation that came in higher than expected for the first 2 months of the year,” Mr. Lago said. — Arra B. Francia