LOCAL EQUITIES rallied on Thursday, as investors looked to the resumption of talks between the United States and China on their ongoing trade war.
The 30-company Philippine Stock Exchange index (PSEi)jumped 2.25% or 171.77 points to 7,804.03 yesterday, while the broader all-shares index also chalked up gains of 2.35% or 108.97 points to 4,732.58.
“I think the resumption of talks between the US and China lifted market sentiments today. Today’s strong close is more of a continuation of the momentum yesterday as the two biggest economies hold a face to face discussion to avert the escalating trade tension between them,” Timson Securities, Inc. trader Jervin S. de Celis said in a mobile message on Thursday.
Officials from China and the United States are scheduled to meet this week to initiate a new round of trade talks. US President Donald J. Trump, however, said he does not “anticipate much” from the negotiations.
The two economies yesterday slapped new tariffs on each other, after the US imposed dues on $16 billion worth of Chinese goods. China retaliated with new tariffs on the same amount of American goods.
Meanwhile, Papa Securities Corp. trader Gabriel Jose F. Perez attributed the increase to foreign investors coming back to the market.
“A fresh round of net foreign buying propelled the index 171.77 points, past the 7,800 level, to close at its high of 7,804.03,” Mr. Perez said in an e-mail.
Foreign investors logged net purchases of P514.21 million on Thursday, higher than the P62.13 million posted in the previous session. This is the highest net foreign inflow recorded for the month of August.
Most sectoral indices stayed in positive territory, led by property which soared 2.85% or 109.24 points to 3,942.26.
Holding firms rose 2.02% or 150.92 points to 7,592.74; financials climbed 1.95% or 34.94 points to 1,823.03; services firmed up 1.82% or 27.84 points to 1,555.64; while industrials added 1.31% or 146.65 points to 11,315.91.
Only the mining and oil sub-index declined, dropping 0.23% or 23.02 points to 9,839.36.
Some 810.37 million issues valued at P7.97 billion switched hands, higher than Wednesday’s P6.48-billion turnover.
Advancers outpaced decliners, 130 to 69, while 50 issues ended flat.
“I guess investors will retest the 7,800-8,000 area despite the absence of local fresh catalyst. So, this sharp upward move of the PSEi after finding support at 7,500 is mainly driven by external news from China and western markets,” Timson Securities’ Mr. De Celis said.
Meanwhile, Wall Street indices ended mixed overnight, with the Dow Jones Industrial Average losing 0.34% or 88.69 points to 25,733.60. The S&P 500 index was flat with a decline of 0.04% or 1.14 points to 2,861.82. The Nasdaq Composite index, meanwhile, went up 0.38% or 29.93 points to 7,889.10. — Arra B. Francia