THE MAIN INDEX sustained its climb yesterday as investors focused on expectations that inflation slowed in March amid the virus outbreak.
The 30-member Philippine Stock Exchange index (PSEi) picked up 87.29 points or 1.64% to 5,408.52 on Wednesday. The broader all shares index also gained 41.04 points or 1.26% to 3,278.81.
“Philippine shares started the second quarter on an optimistic note as investors are hoping the market has bottomed, with many strategists expecting a ‘V’ shaped recovery, a sharp drop in GDP (gross domestic product) in the (second quarter) and a swift snapback in the (third quarter),” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.
The Bangko Sentral ng Pilipinas (BSP) said on Tuesday it expects March headline inflation to ease to 2-2.8% from 2.6% in February. The driver would be the drop in oil prices and the stable food prices due to the implementation of a price freeze amid the declaration of a state of calamity in the country.
Like Mr. Limlingan, Philstocks Financial, Inc. Research Associate Claire T. Alviar pointed to this reason to be among the confidence boosters of investors in yesterday’s trading.
She added the expansion of China’s manufacturing output was also a catalyst for growth, after the country reported a Purchasing Managers’ Index (PMI) of 52 in March earlier this week, exceeding expectations.
“Service sector had the biggest gain today given the slower inflation forecast of BSP as investors anticipate that this sector would benefit the most… This pushed the market in the green territory, despite World Bank’s 3% GDP growth forecast for the Philippines in 2020,” Ms. Alviar said in a text message.
Services rose 27.02 points or 2.26% to 1,219.06 on Wednesday. Other sectoral indices also advanced: holding firms by 94.39 points or 1.80% to 5,327.91; mining and oil by 56.25 points or 1.35% to 4,218.15; financials by 15.77 points or 1.28% to 1,239.41; property by 29.69 points or 1.08% to 2,777.99; and industrial by 50.92 points or 0.80% to 6,412.63.
Value turnover ended at P5.58 billion with 498.18 million issues switching hands, down from Tuesday’s P7.42 billion with 546.31 million issues.
Some 99 names ended higher, 87 names ended lower, and 41 names ended unchanged yesterday.
Net foreign selling narrowed to P418.75 million on Wednesday from P634.52 million on Tuesday.
Meanwhile, Wall Street’s three major indexes tumbled on Tuesday, with the Dow registering its biggest quarterly decline since 1987 and the S&P 500 suffering its deepest quarterly drop since the financial crisis on growing evidence of massive economic damage from the coronavirus pandemic.
The Dow Jones Industrial Average fell 410.32 points or 1.84% to 21,917.16; the S&P 500 lost 42.06 points or 1.60% to 2,584.59; and the Nasdaq Composite dropped 74.05 points or 0.95% to 7,700.10. — Denise A. Valdez with Reuters