By Arra B. Francia, Reporter
SHARES SOARED on Wednesday as investors reacted positively to the drop in oil prices, which could signal slower inflation and faster growth.
The 30-company Philippine Stock Exchange index (PSEi) jumped 2.14% or 159.22 points to close at 7,579.62 yesterday, bouncing back from a two-day losing streak. The broader all- shares index also gained 1.59% or 71.49 points to 4,541.71.
“Western equities markets ended flat in [Tuesday]’s trading, but the big story was the 7 percent drop in oil prices [on Tuesday] night,” Eagle Equities, Inc. Research Head Christopher John Mangun said in an e-mail. “This may be attributed to an expectation of slower global growth, but this will have a positive effect on inflation and local growth and this may have improved overall investor sentiment.”
Papa Securities Corp. Sales Associate Gabriel Jose F. Perez meanwhile attributed the PSEi’s ascent to the rise in futures indices abroad, which may have lifted investor sentiment for the day.
“Its also possible that Dow futures being up by more than 100 points throughout the day boosted sentiment heading into [Wednesday]’s session for the US markets. Take note that the Fed is also set to meet soon on monetary policy with consensus generally expecting a hike,” Mr. Perez said in a separate e-mail.
Wall Street indices posted modest gains overnight, slightly recovering from major losses on Monday’s session. Stock futures however rallied, reflecting the optimism of investors ahead of the Federal Open Market Committee’s policy meeting. Aside from deciding on whether to hike rates again, investors will be looking at the US Federal Reserve’s future policy direction.
The Dow Jones Industrial Average futures gained 0.6% or 128 points. The S&P 500 futures was up 0.6% or 16 points, while Nasdaq 100 futures firmed up 0.6% or 37 points.
Back home, all sectoral indices moved to positive territory, led by holding firms which surged 2.7% or 196.06 points to 7,435.45.
Financials rose 2.28% or 39.64 points to 1,776.28; mining and oil advanced 2.02% or 162.31 points to 8,182.68; property went up 1.92% or 70.44 points to 3,728.60; services climbed 1.09% or 15.73 points to 1,451.05; while industrials went up 0.93% or 102.80 points to 11,074.86.
Net foreign outflows narrowed to P72.98 million compared to Tuesday’s P652.15-million net sales.
Some 1.23 billion issues valued at P5.96 billion switched hands, dropping from the previous session’s P8.5 billion.
Advancers were more than double the decliners, 124 to 60, while 50 names were unchanged.
“[Wednesday]’s gains are exactly what the market needed to maintain the positive momentum. We may get a pullback [on Thursday] but if trading volumes continue to pick up, we may end the week closer to 7,700,” Eagle Equities’ Mr. Mangun said.