LOCAL EQUITIES recovered on Thursday due to improved market sentiment, with inflation expected to continue easing amid softening oil prices.
The bellwether Philippine Stock Exchange index (PSEi) gained 2.93 points or 0.04% to close at 7,268.38, up from the previous finish of 7,265.45. The broader all-shares index was also up by 3.64 points or 0.08% to close at 4,375.28.
Manuel Antonio G. Lisbona, president and director of PNB Securities, Inc. attributed the recovery to improved market sentiment.
“The market was buoyed by the improving sentiment, as softening oil prices and progress on the rice tariffication bill will have a positive effect on the country’s inflation picture,” Mr. Lisbona said via text.
Senate Bill No. 1998 or the rice tariffication bill was approved on its third and final reading last Nov. 14. This amends the Republic Act No. 8178 or the Agricultural Tariffication Act by replacing current quantitative import restrictions for rice with tariffs.
Papa Securities Corp. Head of Research Arabelle C. Maghirang shared the same view, also noting that net buying was recorded in yesterday’s trading.
Net foreign buying was logged at P224.06 million, a reversal of Wednesday’s net sales worth P70.26 million.
“Sentiment may be gaining ground due to a slew of healthy macroeconomic indicators: inflation is seen to ease in the coming months from rice importation and suspension of the oil excise tax…,” Ms. Maghirang said in an e-mail.
“Recent dovish comments by the central bank (tightening cycle nearing its end) could also be propping up investor risk appetite for equities,” she added.
Ms. Maghirang added that the flat performance of US markets benefitted emerging markets.
On Wall Street, the Dow Jones Industrial Average ended flat at 24,464.69; the S&P 500 gained 8.04 points or 0.30% to 2,649.93; and the Nasdaq Composite added 63.43 points or 0.92% to 6,972.25.
Back home, sub-indices were split between gainers and losers. Advancing counters were led by industrials, which went up 50.93 points or 0.47% to close at 10,716.76. Financials gained 4.46 points or 0.26% to end at 1,709.28, and services added 0.79 points or 0.05% to 1,392.28.
On the other hand, losers were led by mining and oil, which went down 20.20 points or 0.24% to finish at 8,222.28. Holding firms dropped 4.63 points or 0.06% to 7,149.02 and property declined by 1.19 points or 0.03% to 3,491.91.
Value turnover dropped to P5.40 billion on Thursday from the previous day’s P7.06 billion as 888.05 million issues changed hands.
Advancers outnumbered decliners, 107 to 75, while 53 names were unchanged.
“At this point, we are very near immediate resistance of 7,270-7,300. If the market breaks out, we can see a retest of 7,500 otherwise, we can see the market head back to support at 6,850,” PNB Securities’ Mr. Lisbona said, adding the market may correct in the coming days following its recent uptrend.
Meanwhile, Papa Securities’ Ms. Maghirang said the index could retest the 7,500 level today. — VMPG