SHARES climbed on Monday, continuing to bounce back from oversold conditions last week.
The 30-company Philippine Stock Exchange index (PSEi) rose 0.68% or 50.61 points to close at 7,433.61 yesterday, extending the gains posted on Friday. The broader all-shares index likewise jumped 0.53% or 24.12 points to 4,531.52.
“The market continues to go up after getting oversold last week. This is just a follow-through from that oversold condition, so that’s why it continued to rebound today,” Diversified Securities, Inc. trader Aniceto K. Pangan said in a phone interview on Monday.
The PSEi booked a steep plunge last week — sliding to the 7,100 and going back to bear market territory — after investors became cautious about inflationary pressures caused by Typhoon Ompong. The government previously reported that the typhoon resulted in P14 billion in agricultural damage in Northern Luzon.
Analysts warned inflation may not taper off in the fourth quarter, as projected by the country’s economic managers, due to this calamity.
Meanwhile, Regina Capital Development Corp. Managing Director Luis A. Limlingan attributed the PSEi’s movement to reduced trade tensions between the United States and China.
“Investors picked up a few more names after the meteoric rise on Friday, as the effect of trade tension seems to have temporarily worn out. The market’s immediate reaction to [US President Donald] Trump’s tariff action and resultant retaliatory step by China was a snap rally,” Mr. Limlingan said.
The US on Sept. 24 imposed a new round of tariffs on $200 billion worth of Chinese goods, bringing the total amount of Chinese imports with new duties to $250 billion since the trade war started in July. In retaliation, China slapped new levies on $60 billion worth of US goods.
The Regina Capital analyst, however, noted the uptrend may be short-lived as investors watch out for both the Federal Open Market Committee and Bangko Sentral ng Pilipinas’ meetings this week. For the local central bank, economists are expecting another 50-basis-point increase to counter the 6.4% headline inflation reading in August.
Four sectoral indices moved to positive territory, led by financials which surged 1.92% or 31.66 points to 1,680.96. The mining and oil counter followed with an increase of 1.77% or 159.95 points to 9,199.20. Holding firms went up 1.14% or 81.08 points to 7,190.51, while services added 0.83% or 12.60 points to 1,517.84.
Meanwhile, property dropped 0.53% or 19.76 points to 3,688.23 and industrials shed 0.45% or 51.06 points to 11,070.69.
Some 1.31 billion issues valued at P4.57 billion switched hands, slowing down from last Friday’s P11.58 billion.
Decliners narrowly outpaced advancers, 97 to 95, while 42 issues remained unchanged.
Foreign investors were sellers for the 18th consecutive day, with net sales climbing to P563.57 million on Monday, ballooning from the previous session’s P132.15-million net outflow. — Arra B. Francia