STOCKS edged higher on Tuesday on bargain hunting following Monday’s decline, amid lingering concerns over the world’s second-largest economy and ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy review this week.
The Philippine Stock Exchange index (PSEi) rose by 6.72 points or 0.1% to close at 6,335.91 on Tuesday, while the broader all shares index inched up by 2.98 points or 0.08% to end at 3,400.87.
“The market was marginally higher amidst cautious bargain hunting after China announced a surprise cut to a key policy rate in an attempt to boost its flagging economy. China cut its medium-term lending facility rate by 15 bps to 2.5%,” China Bank Capital Corp. Managing Director Juan Paolo E. Colet said in a Viber message.
“The index remains on shaky ground as many investors are worried about disappointing macroeconomic data from China and rising US yields,” Mr. Colet added.
Unicapital Securities, Inc. Senior Equity Research Analyst Carlos Angelo O. Temporal likewise said investors were cautious amid concerns over the Chinese economy and ahead of the BSP’s meeting on Thursday.
A broad array of Chinese data on Tuesday highlighted intensifying pressure on the economy from multiple fronts, prompting Beijing to cut key policy rates to shore up activity but analysts say more support is needed to revitalize growth, Reuters reported.
Less than an hour before the release of a batch of July data, China’s central bank unexpectedly cut key policy rates for the second time in three months, underlining the rapid loss of the post-COVID economic rebound that has shaken global financial markets.
Tuesday’s batch of data released by the National Bureau of Statistics, which comes on top of a raft of weak indicators from last week, showed retail sales, industrial output and investment all growing at a slower than expected pace.
Meanwhile, a BusinessWorld poll last week showed that 13 of 15 analysts see the BSP’s Monetary Board keeping its policy rate steady at a near 16-year high of 6.25% at its meeting on Thursday.
Sectoral indices increased on Tuesday, except for mining and oil, which fell by 122.89 points or 1.24% to 9,785.41, and industrials, which declined by 110.49 points or 1.23% to 8,861.77.
Meanwhile, services climbed by 15.40 points or 1% to 1,548.19; property increased by 15.65 points or 0.59% to 2,634.40; financials gained 4.77 points or 0.25% to end at 1,904.43; and holding firms inched up by 0.41 point to 5,970.40.
Value turnover surged to P24.82 billion on Tuesday with 472.74 million shares changing hands from the P4.58 billion with 716.17 million issues seen on Monday.
Decliners outnumbered advancers, 99 versus 80, while 42 names closed unchanged.
Net foreign buying stood at P107.17 million on Tuesday versus the P361.26 million in net selling recorded on Monday.
For Wednesday, Mr. Colet placed the PSEi’s immediate support at 6,300 and resistance at 6,400. — A.H. Halili with Reuters