Stocks rise on foreign buying amid rate hike fears
PHILIPPINE SHARES bounced back on Tuesday on foreign buying ahead of the global index rebalancing and amid fears over looming rate hikes.
The 30-member Philippine Stock Exchange index (PSEi) rose 77.93 points or 1.05% to end 7,458.23 on Tuesday, while the broader all shares index inched up 29.57 points or 0.75% to close at 3,929.18.
“It’s foreign buying that’s lifted the market on a diversification strategy amid US Fed (Federal Reserve) and European Central Bank (ECB) hike jitters and end of Wall Street’s technology shares rally,” First Metro Investment Corp. Head of Research Cristina S. Ulang said in a Viber message.
Net foreign buying continued on Tuesday, totalling P191.24 million, but was lower than the P222.55 million seen on Monday.
The Fed earlier said it is likely to raise borrowing costs starting March to quell rising inflation. Markets expect the US central bank to fire off at least three rate hikes this year.
Over the weekend, Dutch Central Bank President Klaas Knot, who is also a member of the European Central Bank’s (ECB) governing council, said he expects the ECB to start hiking rates by the fourth quarter of 2022, Reuters reported.
ECB President Christine Lagarde last week said they would not explicitly rule out the possibility of a hike within the year, a change from her previous stance that such move will be unlikely.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said shares were bought as investors veered away from other foreign markets and bought into index names ahead of the Morgan Stanley Capital International (MSCI) rebalancing and fourth quarter earnings reports.
MSCI is set to announce on Friday the results of its index rebalancing, which it reviews quarterly and adjusts twice a year.
“Investors took positions with hopes pinned on the continuous improvement of our coronavirus disease 2019 (COVID-19) situation, and a stronger economy this 2022,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said.
On Tuesday, the Department of Health reported 3,574 new cases of COVID-19, bringing active infections to 105,550.
All sectoral indices ended in the green except financials, which slipped 1.45 points or 0.08% to 1,751.38.
On the other hand, holding firms jumped 108.05 points or 1.52% to 7,208.23; services advanced 27.99 points or 1.42% to 1,986.12; industrials climbed 117.07 points or 1.09% to 10,811.44; mining and oil rose 108.36 points or 1.01% to 10,748.81; and property added 19.30 points or 0.59% to 3,287.29.
Advancers beat decliners, 116 versus 77, with 51 names closed unchanged.
Value turnover declined to P6.99 billion with 1.07 billion issues traded from the P9.21 billion with 1.13 billion shares that switched hands on Monday. — MCL with Reuters
