The stock market on Tuesday defied a regional sell-off, pushed higher for the second session in a row by surging Globe Telecom Inc. in spite of investors’ caution ahead of the Federal Reserve’s much-awaited decision later this week on whether it would increase interest rates, analysts said.
The benchmark Philippine Stock Exchange Index (PSEi), gained 0.50 percent or 35.37 points to end the day at 7,148.26, while the wider All Shares also recorded a 0.50 percent advance, adding 20.48 points to finish at 4,124.00.
Astro del Castillo, president and managing director of First Grade Finance Inc. said the market was buoyed by Globe Telecom Inc.’s (GLO) share, which soared by 8.59 percent or P164 to P2,074 apiece.
“This is a spillover effect from Monday’s news that the SMC (San Miguel Corp.) deal with Australian telco giant Telstra would no longer push through” del Castillo said.
He explained that although Asian stock markets were generally down, the country’s bourse managed to defy the trend because of the overwhelming interest in Globe’s stocks.
“The rest of the stocks did not register significant gains in today’s [Tuesday] trading compared to Globe. We were really pulled up by Globe,” he said, pointing out that its competitor Philippine Long Distance Telephone Company’s (TEL) shares were unmoved from Monday’s 11.56 percent increase.
Del Castillo also noted that investors in general are now “cautious” ahead of the Federal Reserve’s meeting on March 17 and 18.
Jun Calaycay, head of research and marketing at A&A Securities Inc., agreed that the US Federal Reserve’s decision is much awaited by everyone, even though the consensus among investors seems to be that the Fed will hold off on an interest rate adjustment for now.
“One more central bank decision hangs in the balance– the US Federal Reserve. With the ECB [European Central Bank, the BOJ [Bank of Japan] and even the PBOC [People’s Bank of China] maintaining a dovish tone, it will be interesting how the Janet Yellen-led body will move – or as many quite expect, not move,” Calaycay said.
Calaycay noted that during the first two days of the week, the local bourse has shown strength, adding that although such strength is insufficient to protect early gains, the progress is sufficient “to keep prices above the red-line.”
“Absent any surprises from the US Fed or from other areas of concern markets have been focused on through much of this year-to-date, the PSEi is expected to make further attempts to break past the 7200-line. At this point, it goes without much elaboration that [7,200] presents the main and strongest resistance point,” he said.
The PSEi’s year-to-date return now is up by 2.82 percent, while the month-to-date is has increased by 7.2 percent, Calaycay further noted.
Total value turn over Tuesday was strong at P8.293 billion, with losers outnumbering winners, 101 to 87, and 47 issues remaining unchanged.
All sectoral sub-indices closed higher except for the mining and oil and property sectors, with the services sector, where GLO is listed, enjoying the highest gain at 1.31 percent.