The stock market regained some ground to return to the 7,000 level on Thursday, with investors welcoming the latest US data pointing to the Fed not hiking policy rates anytime soon.
The benchmark Philippine Stock Exchange index (PSEi) gained 120.63 points to 7,045.40, up 1.74 percent, while the All Shares index rose by 1.43 percent or 56.88 points to 4,046.37.
Joylin F. Telagen, research analyst at IB Gimenez Securities Inc., said investors were in a buying mood as weak US retail sales supported views that a Fed rate hike would not occur this year.
“The PSEi was up on optimism that the Federal Reserve interest rate hike would be delayed until next year due to disappointing retail sales,” Telagen said.
This was echoed by Bryan Gomez, co-head of investments at Citisecurities Inc., who said the retail sales data had weighed on the dollar.
“The strong peso against the dollar, similar to how other emerging currencies are gaining strength against the dollar, is propping up share prices,” Gomez said.
On Wednesday, the US Commerce Department reported that September retail sales had increased by a mere 0.1 percent as cheaper gasoline prices lowered service station sales by 3.2 percent.
“If the market continues this strength, it might be a case for further weakness in the dollar in the near future. In the next few days, prices will just be range bound within 6,600 to 7,200,” Gomez said.
Trader Gerald Tan of Papa Securities Inc., for his part, described the Thursday rally as more of a bounce-back from a heavy two-day sell-off.
“The stock market just rebounded today because there was already two consecutive days of massive losses and a lot of gaming stocks were already oversold,” Tan said.
He was referring to Bloomberry Resorts Corp. and Travellers International Hotel Group Inc., which both rose by 10.83 percent and 5.47 percent, respectively.
“Overall, I think that the PSEi will test the 7,600 to 7,700 level before the year ends,” Tan added.
For next week, IB Gimenez’s Telagen said the first surge of the third quarter corporate earnings reports would “determine the index direction.”
“I expect that index aggregate earnings should be higher than first quarter (8 percent) and second quarter (5 percent) growths to invite overseas inflows back to the market,” she said, adding: “If foreign investors come back, 7,600 is still possible at the end of the year coupled by good double-digit aggregate corporate earnings of PSEi issues.”
Total volume amounted to 1.529 billion shares valued at P5.995 billion on Thursday. Gainers outnumbered losers, 121 versus 66, while 37 issues did not move.
The bourse topped 7,100 last week, tracking gains on Wall Street, but fell to 6,900 territory on news underscoring a slowdown in China.