LOCAL STOCKS Wednesday climbed to a 31-month high, breaking past a key barrier at 3,500 as selective buying of index stocks defied a cautious overseas sentiment.
The main-share Philippine Stock Exchange index gained 19.51 points or 0.56 percent to end at 3,503.49—its highest close since ending at 3,503.70 on Jan. 11, 2008.
The local stock market, one of the best performing in the world, has now gained 450.81 points or about 15 percent since the start of this year.
“Basically, we’re in the middle of earnings reporting season so there’s some demand for stocks anticipated to have performed well in the second quarter,” said Jose Mari Lacson, head of research at local stockbrokerage Campos Lanuza & Co.
“At the same time, there’s so much liquidity in the market. Interest rates have declined so much so there’s a lot of liquidity going to the stock market,” Lacson said.
The property and holding firm counters led the intra-day rally, surging 1.76 percent and 1.2 percent, respectively.
Among the day’s top index gainers were property issues Megaworld, Filinvest Land and Ayala Land.
The interest rate-sensitive property sector is seen benefiting from a potentially prolonged regime of low interest rates given risks of a double-dip global recession and deflation.
Consumer-oriented stocks Alliance Global Group, Jollibee and Universal Robina were also among the day’s gainers.
The local market stood resilient despite an overnight profit-taking in Wall Street. Value turnover amounted to P3.25 billion. The 61 advancers equaled the number of decliners while 45 stocks were unchanged.
Among the stocks that succumbed to profit-taking were Metrobank, Aboitiz Power, EDC, BPI, Globe Telecom, PLDT, First Gen and Philweb.
Losses incurred by the services and mining/oil sectors tempered the day’s gains.
“Weak US data added to investor worries over the growth path of the economy ahead, pulling stocks largely lower overnight. Meanwhile, earnings reports in the US failed to lift sentiment when the market is so used to upside surprises,” said investment bank Credit Agricole CIB.
It said global markets were now focused on the upcoming Federal Open Market Committee (FOMC) meeting on Aug. 10. The Fed is believed to be working under the assumption that the most likely scenario would be for a gradual but uneven recovery.
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