PHILIPPINE SHARES bounced back yesterday as investors turned to the local market amid the decline in regional and global equities.
The benchmark Philippine Stock Exchange index (PSEi) picked up 28.45 points or 0.50% to close at 5,654.70 on Thursday. The broader all shares index added 8.67 points or 0.25% to 3,408.65.
“Investors parked funds into the Philippines market as investors grappled with regional downbeat remarks from Powell along with worries over the market’s valuation,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.
The head of the Federal Reserve warned on Wednesday of an “extended period” of weak economic growth, vowed to use the US central bank’s power as needed, and called for additional fiscal spending to stem the fallout from the coronavirus pandemic.
Fed Chair Jerome Powell issued his sober review of an economy slammed by a record pace of job losses and bracing for worse ahead as most U.S. states moved toward reopening after weeks of shutdowns aimed at slowing the spread of the novel coronavirus.
Mr. Powell pointed to uncertainty over how well future outbreaks of the virus can be controlled and how quickly a vaccine or therapy can be developed, and said policymakers needed to be ready to address “a range” of possible outcomes.
This resulted in drops in stock markets abroad, which started in Wall Street on Wednesday. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite indices all fell 2.17%, 1.75% and 1.55%, respectively, after Mr. Powell’s remarks.
Asian stocks also closed in red territory on Thursday. Japan’s Nikkei 225 and Topix indices dropped 1.74% and 1.91%, respectively, while China’s Shanghai Shenzhen CSI 300 and Shanghai SE Composite indices gave up 1.08% and 0.96%, respectively.
Mr. Limlingan said this weakness led investors to flock to Philippine shores on Thursday, which was among the few stock markets that gained in the region.
The property index led the gainers among local sub-sectors, increasing 91.71 points or 3.25% to 2,909.80. Industrials climbed 21.47 points or 0.28% to 7,570.18; services added 0.93 point or 0.07% to 1,311.72, while mining and oil increased 1.67 point or 0.03% to 4,550.55.
Others closed in red territory, namely financials which lost 11.31 points or 0.97% to 1,151.46; and holding firms which shed 41.63 points or 0.74% to end at 5,553.28 yesterday.
Some 1 billion issues valued at P3.78 billion switched hands yesterday, rising from Wednesday’s 422.90 million issues worth P4.79 billion.
Decliners outnumbered advancers, 114 against 56, while 53 names ended unchanged.
Despite the decline in global equities, foreign investors remained net sellers at the PSE, although net outflows dropped slightly to P367.02 million from P394.37 million. — Denise A. Valdez with Reuters