THE Philippine Stock Exchange index (PSEi) on Wednesday rose for the second consecutive trading day as investors hunted for bargains in an oversold market on bets that a US interest rate hike is not likely to happen in the near future.
The main PSEi climbed 30.83 points or 0.41 percent to close at 7,536.31, while the wider All Shares added 11.86 points or 0.28 percent to 4,324.13.
More than 681.98 million shares, valued at P8.49 billion, changed hands. Decliners outpaced advancers, 90 to 70, while 44 issues traded unchanged.
“Bargain-hunting greeted large-caps on Wednesday, especially those that have breached oversold levels. Speculatives were also highlighted, after benchmark crude prices ticked higher,” said Jason Escartin, investment analyst at F. Yap Securities Inc.
Bargain hunting and a show of confidence that the US Federal Reserve won’t raise interest rates anytime soon led to the gains made by the PSEi, Jason Bibit, equity analyst at Regina Capital Development Corp., said.
“It’s mostly bargain hunting and the likelihood that the Fed won’t raise rates this month. A lot of stocks have rallied from oversold levels, so that should continue later this week,” Bibit said.
In spite of such optimism, Bibit noted the Greece debt issue is still weighing on the market. He noted the euro debt problem remains “a major headwind” hindering the market from piercing the resistance level at 7,600.
“Technically, the index needs to close above 7,600 to sustain its recent momentum. If not, we may still move sideways,” Bibit said.
“The recent highs are far away and we need a big catalyst or catalysts to go back to those levels.
“After 7,600, the next resistance level is at 7,770,” he added.
“The market is correcting an oversold condition, rising on low volume,” Citisecurities Inc. Cohead of Investments Bryan Gomez said.
“Bargain hunters seem to have temporarily found a support level. It’s a tossup in the next few days if the buying will continue,” he added.
Two of the six subindices declined on Wednesday. Services fell by 0.80 percent and mining and oil slipped by 0.09 percent, while the rest led by the industrial sector that rose by 1.53 percent posted gains.
The 10 most actively traded stocks were mixed, with five gainers and five losers. The top decliners were Alliance Global Group Inc., Philippine Long Distance Telephone Co., Metropolitan Bank and Trust Co., SM Investments Corp., and Ayala Land Inc. The advancers were Universal Robina Corp., BDO Unibank Inc., Semirara Mining and Power Corp., JG Summit Holdings Inc., and Megaworld Corp.