STOCKS bounced back on Thursday as data showed the economy’s expansion in 2021 was within the government’s target, boosting recovery prospects.
The bellwether Philippine Stock Exchange index (PSEi) went up 19.91 points or 0.27% to end at 7,273.52 on Thursday, while the broader all shares index advanced 5.38 points or 0.14% to close at 3,861.49.
“The market’s sideways movement ended in the green territory as positive sentiment stemming from the local economy’s 2021 performance eventually dominated,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
The country’s gross domestic product (GDP) grew by 7.7% in the fourth quarter, a reversal of the 8.3% contraction in the comparable 2020 period, the Philippine Statistics Authority reported on Thursday. This was also faster than the revised 6.9% expansion logged in the third quarter.
This brought the full-year growth to 5.6%, rebounding from record 9.6% contraction in 2020. This was higher than the 5.3% median estimate and the 5%-5.5% 2021 growth assumption of the Development Budget Coordination Committee.
Mr. Tantiangco however noted that trading was still lethargic, with value turnover below last year’s daily average of P7.38 billion.
Value turnover went down to P6.25 billion with 1.66 billion shares switching hands on Thursday, from the P6.41 billion with 1.5 billion issues traded the previous day.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the GDP data buoyed local sentiment as global markets have been seeing sell-offs amid inflation concerns.
“The local market managed to hold decently despite weakness seen from the US. Such weakness in the region surfaced after the US Federal Reserve said that they had more room to raise rates as the inflationary threat remains,” COL Financial Group, Inc. Chief Technical Analyst Juanis G. Barredo said in a Viber message.
Asian shares plunged to their lowest in nearly 15 months on Thursday after the Fed’s chairman signaled plans to steadily tighten policy, Reuters reported.
In its latest policy update on Wednesday, the Fed indicated it is likely to raise US interest rates in March, as has been widely expected, and reaffirmed plans to end its bond purchases that month before launching a significant reduction in its asset holdings.
Back home, most sectoral indices ended in the green except for mining and oil, which sank by 207.55 points or 1.99% to 10,207.68; and holding firms, which dropped 18.85 points or 0.26% to close at 7,131.28.
On the other hand, financials climbed 21.72 points or 1.34% to 1,642.60; services gained 12.25 points or 0.62% to 1,980.47; industrials went up 33.35 points or 0.31% to 10,507.76; and property inched up by 0.13 point to end at 3,180.20.
Decliners beat advancers, 102 against 74, while 62 names closed unchanged.
Net foreign selling declined to P676.14 million from the P870.31 million recorded on Wednesday. — M.C. Lucenio with Reuters