STOCKS extended their climb to reach a new record high on Tuesday as investors anticipate the nearing approval of the government’s tax reform package.
The bellwether Philippine Stock Exchange index (PSEi) rose 0.68% or 56.65 points to 8,312.93.
Yesterday’s close was a fresh peak for the main index, eclipsing the 8,294.14 logged last Sept. 18.
The all-shares index climbed 0.5% or 24.64 points to 4,892.
“Philippine stocks broke new ground once more and US stock benchmarks traded in record territory Monday afternoon, as equities resumed a steady run-up that could set the tone for the final three months of 2017,” said Regina Capital Development Corp. Managing Director Luis A. Limlingan in a text message.
“The moves for stocks occurred amid an upbeat tone on Wall Street despite a mass shooting event in Las Vegas that is being described as the worst in US history. European stocks kicked off the week in an upbeat mood on Monday, getting a boost from a weaker euro that tumbled after violent clashes in Catalonia in Spain,” Mr. Limlingan added.
US stocks started the fourth quarter on a strong note on Monday, with all three major indexes hitting record high closes as data pointed to underlying strength in the economy.
The Dow Jones Industrial Average rose 152.51 points or 0.68% to 22,557.6; the S&P 500 gained 9.76 points or 0.39% to 2,529.12; and the Nasdaq Composite added 20.76 points or 0.32% to 6,516.72. All three posted record high closes.
“On catalysts, I’m looking at the passing of the tax reform package of the government,” said Ramon Emmanuel B. Badiola, equity analyst/trader at Meridian Securities, Inc. in a phone interview yesterday, although noting that the proposal’s impact will “not [be] that high in terms of the value,”
The Senate version of the tax reform bill is expected to generate up to P59.9 billion in additional revenues in the first year of implementation, much lower than the projected revenue programmed in the 2018 national budget and 55.23% lower than the P133.8 billion estimated net gain from the House version of the bill.
“We’re also eyeing the positive results of third-quarter earnings,” Mr. Badiola added.
Most sector counters went up on Tuesday.
Services led the charge, surging 1.17% or 20.10 points to 1,731.38; financials jumped 1.03% or 20.46 points to 1,996.97; holding firms climbed 0.52% or 44.05 points to 8,427.25; property went up 0.38% or 14.89 points to 3,901.92; and industrials inched up 0.08% or 9.25 points to 11,115.77. Only mining and oil closed in the red, falling 0.06% or 8.60 points to 13,879.19.
Advancers outnumbered losers at 105 to 94 as 55 issues were unchanged.
Value turnover went down to P7.25 billion from Monday’s P7.41 billion as 1.47 billion shares changed hands.
Foreigners continued to dump shares with net selling at P689.83 million, higher than Monday’s net outflow of P271.46 million. — Janina C. Lim with Reuters
