Stocks extend rally as market sentiment improves

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THE Philippine Stock Exchange index (PSEi) rose on Thursday, tracking Wall Street to hit a record, reaffirming investor interest in local equities.

The bellwether index climbed 91.03 points or 1.13% to close at 8,144.91. This is a new record high for the PSEi, besting the 8,127.48 finish logged on April 10, 2015.

The all-shares index rose by 39.56 points or 0.82% to 4,815.91.

“Philippine stocks traded higher as it challenged the previous all-time closing high today. Investors are anticipating the approval of a revised tax reform to be passed in October,” Luis A. Limlingan, business development head at Regina Capital Development Corp., said on Thursday.

“US stocks closed slightly higher on Wednesday, notching another record high, as a gain in the energy sector offset losses in tech,” he said. “President [Donald J.] Trump’s push for bipartisan support on tax reform helped to support the greenback with some short covering on the dollar ahead of next week’s FOMC (Federal Open Market Committee) meeting and expected details of the shrinking of the balance sheet.”

Wall Street edged up to a record high on Wednesday. The Dow Jones Industrial Average rose 39.32 points or 0.18% to 22,158.18 The S&P 500 gained 1.89 points or 0.08% to 2,498.37, and the Nasdaq Composite added 5.91 points or 0.09% to 6,460.19.

Mr. Limlingan also told Reuters that “some investors are also hopeful that the Senate will pass the tax reform measures next month.”

The House passed the tax reform bill in May aimed at generating revenue to fund a multibillion-dollar infrastructure program key to the government’s economic agenda.

“It seems money is now coming back after the ghost month. But the volume is not significant, so it’s too early to say that this is sustainable,” Joseph Y. Roxas, president of Eagle Equities Inc. told Reuters.

Analysts say China’s “ghost season” stalls momentum in the markets as some Chinese investors reduce trading during this period.

All counters finished higher, with property stocks leading the charge as it logged a 68.32-point rise or 1.79% to 3,876.61.

Holding firms rose by 123.86 points or 1.56% to 8,042.56; mining and oil jumped 143.47 points or 1.02% to 14,088.15; services gained 4.59 points or 0.26% to 1,726.32; financials advanced by 4.37 points or 0.22% to 1,982.68; and industrials rose 16.55 points or 0.14% 11,292.04.

Value turnover dropped to P8.45 billion from Wednesday’s P12.88 billion, with 1.26 billion  shares changing hands.

Advancing stocks totaled 111, outpacing decliners at 85, while 62 issues finished unchanged.

Foreigners however sold their shareholdings, with net outflows logged at P99.81 million yesterday, a reversal of the P3.34-billion net inflow seen on Wednesday. — V.V. Saulon with Reuters