Stock Market

PSE index back above 7,000 on bargain hunting

Posted on January 05, 2017

THE BELLWETHER INDEX rallied to return above the 7,000 line on Wednesday as investors picked up bargains following the market’s weak performance as 2016 closed.

The Philippine Stock Exchange index (PSEi) finished strong yesterday, climbing 2.47% or 169.64 points to reach 7,030.95 on the second trading day of the year. The all-shares index also gained 1.94% or 81.22 points to close at 4,247.78.

Harry G. Liu, president of Summit Securities, Inc., said what drove up the market was “basically bargain hunting.”

“The market has already been very soft the last few weeks before the yearend, but it never breached the major support of the index at 6,800,” he said. “So the market is under oversold condition where you can notice that the volume has been very thin.”

On Wednesday, trading value surged to P7.59 billion from the P2.68 billion seen the previous session. More than 1.38 billion shares changed hands, up from 664.21 million shares on Tuesday.

Mr. Liu said yesterday’s bargain hunting was also spurred by “the perception that Donald Trump might improve the economy of the United States.”

“The US market is improving quite well, so our market took the cue,” he said, adding that some investors came back to accumulate shares at a lower price.

All sectoral indices closed higher yesterday, with property leading the rise with a 3.60% or 110.62-point gain to 3,182.24. Services also climbed 2.93% or 38.25 points to 1,339.75; financials leaped by 2.26% or 37.54 points to 1,694.50; holding firms went up 1.87% or 131.21 points to 7,142.21; industrials gained 1.40% or 151.11 points to 10,872.27; and mining and oil ascended by 1.39% or 166.17 points to 12,122.77.

Advancers trumped decliners, 144 to 43, while 41 names closed flat

Foreigners remained net buyers, although purchases dropped to a net P184.08 million from Tuesday’s P319.05 million.

“In the meantime, I only expect a medium-term rise and [for the market] to consolidate for a while,” Mr. Liu said.

He said the market’s long-term performance would depend on whether the medium-term turns out to be a positive consolidation.

Southeast Asian stock markets, except Indonesia, rose on Wednesday as investors took cues from a rally on Wall Street and European markets overnight which were boosted by upbeat factory activity data in the United States and the euro zone. US factory activity accelerated to a two-year high in December, while construction spending hit a 10-1/2-year high in November. In the euro zone, manufacturing activity hit the fastest pace in more than five years in December.

Singapore stocks rose as much as 0.80%, with consumer shares and financials pushing up the index.

Thai stocks were up as much as 0.90% to hit their highest in nearly five months. Malaysia rose 0.50%, while Vietnam stocks climbed to its highest in more than two weeks. -- VVS with Reuters