Stocks rebound on Fed plan to buy firms’ bonds
By Denise A. Valdez, Reporter
LOCAL SHARES closed higher on Tuesday, joining a region-wide climb, after the US Federal Reserve announced plans to help corporations amid the coronavirus disease 2019 (COVID-19) pandemic.
The 30-member Philippine Stock Exchange index (PSEi) gained 117.93 points or 1.91% to close at 6,281.75, while the broader all shares index added 52.78 points or 1.44% to end at 3,699.61.
“Global equities markets bounced back after the Federal Reserve announced that it will begin its corporate bond-buying program… Here at the PSE, the main index ended higher as we see more optimism from investors after the US Fed’s recent moves,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail.
The Federal Reserve announced on Monday it will start buying up to $250 billion corporate bonds in its latest initiative to support the economic decline due to the COVID-19 pandemic.
This will be done through the secondary market corporate credit facility, an emergency facility recently introduced by the US central bank, Reuters reported Monday.
The Fed also started its Main Street lending program, which is expected to assist small and medium-sized businesses survive the pandemic through loans.
“The local market joined its regional peers who were also cheered by the latest developments with the US’ monetary policy,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a text message.
“We had bargain hunting today as investors capitalized on Monday’s steep decline,” he added.
Japan’s Nikkei 225 and Topix indices rose 4.88% and 4.09%, respectively, China’s Shanghai Shenzhen CSI 300 index climbed 1.51%, and South Korea’s Kospi index gained 5.28%.
Back home, nearly all sectoral indices ended trading in green territory. Financials picked up 40.13 points or 3.29% to 1,259.12; holding firms rose 186.95 points or 2.96% to 6,487.48; mining and oil advanced 120.06 points or 2.40% to 5,112.34; services increased 19.77 points or 1.41% to 1,419.49; and property improved 17.58 points or 0.56% to 3,110.98.
The only index that closed lower was industrials, which shed 39.08 points or 0.49% to 7,828.62 at the end of Tuesday’s session.
Value turnover stood at P6.99 billion with 968.67 million issues switching hands, lower from the previous day’s turnover of P7.76 billion with 1 billion issues.
Advancers bested decliners, 141 against 54, while 46 names ended unchanged.
Offshore investors remained net sellers on Tuesday with net outflows of P1.22 billion, slightly higher from a previous day’s P1.18 billion.
“We may continue to see the main index move lower in the coming days to test support at 5,950. (MerryMart Consumer Corp.) remains the best performer as it closes at its ceiling for a second day,” Mr. Mangun said.
