Shares rise further as China cuts benchmark rate
By Denise A. Valdez, Reporter
THE MAIN INDEX sustained its climb on Thursday as positive investor sentiment due to China’s rate cut buoyed the local bourse.
The benchmark Philippine Stock Exchange index (PSEi) added 16.06 points or 0.21% to end at 7,413 on Thursday, while the broader all shares index gained 13.78 points or 0.31% to 4,375.87 at the close.
“The market rose on the back of positive investor sentiment as reports circulated that China may release another economic stimulus to soften the economic impact brought by the COVID-19 (coronavirus disease 2019) outbreak,” Timson Securities, Inc. Trader Darren T. Pangan said in a text message.
Reuters reported yesterday that China is reducing its lending rate in an effort to support its economy that is being challenged by COVID-19. China’s one-year loan prime rate (LPR) was cut by 10 basis points to 4.05% and the five-year LPR was trimmed by five basis points to 4.75%.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan pointed to the same reason as driver of the market’s movement yesterday, adding that this news came after the US Federal Reserve impressed interest rates may not change soon.
“Local shares closed higher on signs that China may be planning further measures to support its economy as it reels from a virus-induced slowdown and after Federal Reserve officials signaled they aren’t anxious to raise interest rates anytime soon,” he said.
Most Asian markets closed in green territory on Thursday. Japan’s Nikkei 225 and Topix indices increased 0.34% and 0.16%, respectively. China’s CSI 300 and Shanghai SE Composite indices likewise grew 2.30% and 1.84%, respectively.
Wall Street was up on Wednesday’s close as well. The Dow Jones Industrial Average, the S&P 500 and the Nasdaq Composite indices rose 0.40%, 0.47% and 0.87%, respectively.
Back home, sectoral indices were equally divided among gainers and losers. Property climbed 36.29 points or 0.92% to 3,982.95; financials improved 14.16 points or 0.81% to 1,751.41; and mining and oil climbed 5.35 points or 0.07% to 7,109.14.
On the other hand, holding firms lost 18.29 points or 0.25% to 7,211.70; services shed two points or 0.13% to 1,469.68; and industrial gave up 8.81 points or 0.09% to 9,053.07.
Value turnover stood at P5.79 billion with 1.86 billion issues switching hands. This is slightly lower than Wednesday’s P6.49 billion worth of 621.16 million issues.
Names that gained at the close of trading were 90, those that declined were 84, and those unchanged were 54.
Offshore investors turned bearish yesterday, with net foreign selling reaching P533.02 million from Wednesday’s net inflows of P62.97 million.
Timson Securities’ Mr. Pangan said the PSEi managed to break into the 7,400 level after five days despite average volume and foreign flows turning to selling yesterday.
