After the benchmark market index dipped below the 7,100-point mark during the early hours of Tuesday trading, local stocks managed to rally and escape from a three-day losing trend.
Freya Natividad, an analyst at the online brokerage 2TradeAsia.com, said in a text message that technical rallies were felt in the session, as bargain hunters took opportunities to reposition following the latest setbacks of the index.
After staying in the red in the early hours of trading, the Philippine Stock Exchange index (PSEi) ended up climbing slightly by 0.22 percent, or 15.71 points to close at 7,113.22. During the morning trade, the PSEi extended its decline and went down 68.31 points, or 0.96 percent to 7,029.20.
The broader all-shares index even regained 0.14 percent, or 6.18 points to 4,377.97.
Jun Calaycay, Accord Capital Equities Corp. analyst, previously said that a more objective view reveals that other than the uncertainty of what the first quarter of gross domestic product result will be, nothing has changed in the domestic front.
“While there is a popular consensus that the number may not be better than the 6.4 percent of the same quarter last year, a large part of the forecast see it at 6 percent, give or take,” he said.
Calaycay, however, added that while the market may trade higher in the ensuing sessions, participants should closely watch out for gaps in the opposite direction.
“Island reversals are strong short-term reversal patterns. It gives rise to a trading stance of selling on strength,” Calaycay noted. He also said that external developments mentioned earlier as well as other news provided the backdrop for the market to satisfy the chart’s requirements.
On Tuesday, majority of the sectoral indices also recovered with only two staying in the red.
Mining and oil surged 4.09 percent, or 671.05 points to close at 17,068.69, followed by the property counter which went up by 1.08 percent, or 31.45 points to 2,953.19.
Industrial gained 40.99 points to 10,668.23 for a 0.39-percent increase, while financials closed positively flat at 1,811.68, 0.85-points higher, or 0.05 percent.
Services, on the other hand, fell 0.22 percent, or 4,63 points to 2,094.34, while holding firms went down 0.12 percent, or 7.44 percent to close at 6,383.60. Total value turnover was lower at P7.61 billion. Advancers dominated decliners, 91 to 46, while 46 shares were unchanged.
Philippine stocks on Monday welcomed the week with a 2-percent decline, falling deeper into red as the consolidation phase continued. On Monday, the PSEi resumed its sideways trend, welcoming the week with a 2.36-percent plunge into the red, or 171.40 points to close at 7,097.51.
The broader all-shares index also remained in the red, losing 2.10 percent, or 93.70 points to 4,371.79.
“For the longest time, investors have sought a correction. Previous retreats that amounted to no more than 50 points were deemed insufficient to invite aggressive purchases,” Calaycay said.
“Yet the retreat of the last three sessions totaling 287.56 points or 3.89 percent, rather than inviting the buyers, has elicited fears.
Such is the collective fickle mind of the market,” he added.