Stock Market

Stocks defy selling in US, Asia

Posted on September 03, 2011

BUOYED BY banking issues, stocks closed higher on Friday, defying the wave of selling in the US and other Asian markets.

The Philippine Stock Exchange index (PSEi) rose by 0.60% or 26.32 points to 4,392.91, while the broader all-share index climbed by 0.26% or 7.85 points to 3,058.11.

"Investors were unruffled by (the drop) in the Dow overnight and Asian markets’ slide, slowly shifting funds away from speculative plays to fundamentally-sound blue-chips and second-tier issues battered in the recent weeks’ sell off," said analyst Justino B. Calaycay, Jr. of brokerage firm Accord Capital Equities, Corp. in a market report on Friday.

Banking stocks provided the lift, as reflected in the uptick in the financial subindex. Rizal Commercial Banking Corp. surged by 7.40% or P2.30 to P33.40, while medium-sized Security Bank Corp. rose by 3.20% or P2.95 to P95.10. Metropolitan Bank & Trust Co. added 0.34% or 25 centavos to P74.

On Thursday in the US, the Federal Reserve’s investigation into Goldman Sachs snapped Wall Street’s four-day rally. Investment bank Goldman Sachs was ordered to review its mortgage and foreclosure practices, which were said to be exhibiting "a pattern of misconduct and negligence."

US investors were also skittish over an upcoming jobs report that could reinforce fears of a double-dip recession.

Blue-chip Dow Jones industrial average lost 1% or 119.96 points to 11,493.57, while the broader Standard & Poor’s 500 index fell by 1.2% or 14.47 points to 1,204.42. Tech-rich Nasdaq composite index declined by 1.3% or 33.42 points to 2,546.04.

At home, turnover slid P4.480 billion from P6.057 billion on Thursday. Foreigners bagged stocks for the second consecutive day, with net foreign buying at P34 million.

Decliners led advancers 82 to 64, while 45 stocks were unchanged.

Most subindices ended the week in the green, led by financial that gained 1.01% or 10.02 points to 999.75, followed by holding firms that added 0.98% or 33.45 points to 3,444.97.

Services and industrial jumped by 0.20% or 3.09 points to 1,552.49 and 0.04% or 2.82 points to 7,107.92, respectively.

Mining and oil and property, on the other hand, shed 0.97% or 244.81 points to 24,890.94 and 0.07% or 1.05 points to 1,549.66, respectively.

"The local market has proven it is resilient, keeping on the green despite a drop in most of its global peers. This reflects the optimism on the prospects of the broad economy despite a less-than-forecasted 3.4% GDP pace in the second quarter," said Mr. Calaycay.

Major factors heading into next week will be the inflation rate for the month of August, which analysts believe will be within the government’s target range, he added.

The market remained in consolidation mode, however, said analyst Joseph Y. Roxas, president of brokerage firm Eagle Equities, Inc. in a telephone interview yesterday.

He also noted many stocks fell after the stock exchanged they would be remained from the main index starting Sept. 12.

"By next week, the market should be able to recover from the fallout following main index’s recomposition," Mr. Roxas said. -- Franz Jonathan G. de la Fuente