THE MAIN INDEX soared past the 7,900 level on Wednesday, following optimistic views on trade relations between the United States and China alongside the continued flow of foreign funds into the local bourse.
The bellwether Philippine Stock Exchange index (PSEi) surged 2.82% or 217.55 points to 7,919.67 yesterday, recovering from its decline in the previous session.
The all-shares index likewise jumped 2.02% or 93.80 points to 4,727.97.
“The market’s surge reflects rising optimism on US-China trade relations, as well as subsiding local inflation. So far, foreign funds have been net buyers since the start of the year. We are hoping that this will continue,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said via text.
China’s foreign ministry announced yesterday that it has concluded trade talks with the US, which had extended into a third day versus the scheduled two. Officials said this indicates the serious nature of the discussions.
With this, Wall Street registered strong gains overnight. The Dow Jones Industrial Average jumped 1.09% or 256.10 points to 23,787.45; the S&P 500 index edged higher by 0.97% or 24.72 points to 2,574.41; while the Nasdaq Composite index also advanced 1.08% or 73.53 points to 6,897.
Aside from warming trade relations, Diversified Securities, Inc. trader Aniceto K. Pangan also attributed the uptrend to the market’s net foreign buying position of P1.37 billion. This is about nine times the P152.33-million net inflow on Tuesday, and is the fifth straight session of net purchases.
“Market manifested an uptrend today on the continued investment inflows from overseas fund with a net foreign buying of more than P1.37 billion after inflation simmered down substantially for two consecutive months and dovish remarks from US Fed favoring emerging markets particularly Philippines on attractive valuation,” Mr. Pangan said in a separate message on Wednesday.
December inflation slowed to 5.1% from six percent in November, the second time that prices of goods eased since September and October’s peak of 6.7%.
Sectoral indices were gainers across-the-board, led by holding firms which climbed 4.47% or 339.43 points to 7,918.66.
Services firmed up 2.52% or 37.45 points to 1,519.47; property rose 2.2% or 85.24 points to 3,955.85; financials gained 1.37% or 24.45 points to 1,797.86; industrials added 0.48% or 54.78 points to 11,362.95; while mining and oil also closed 0.4% higher or 35.14 points to 8,814.39.
Some 3.37 billion issues worth P10.17 billion switched hands, much higher than Tuesday’s P6.03 billion.
Advancers were double the decliners, 140 to 72, while 30 names were unchanged.
“The market is now within striking distance of the psychological resistance level of 8,000. If the market will move and close decisively above 8,000, we could see it test 8,250…otherwise it’s back to support at 7,580,” PNB Securities’ Mr. Lisbona said. — Arra B. Francia