Local shares surged nearly 2 percent Tuesday, extending the previous day’s 2.9 percent rally, pushing the index to breach the 7,700 mark for the first time since August, when concerns about a Fed rate hike weighed on sentiment.
President Duterte’s visit to China this week has lifted the market for a second straight day Tuesday, with most analysts expecting the four-day state visit will result in more investments in the country, particularly on infrastructure.
The main PSEi jumped by 1.99 percent or 150.42 points at 7,721.57, while the broader All Shares rose by 1.66 percent or 74.11 points at 4,534.49.
“It’s a combination of positive news that pushed investors to get back into the market,” said Joylin Telagen, an analyst at IB Gimenez Securities. She cited the stable Chinese economy, with the third quarter data coming in as expected, Moody’s upbeat prognosis on Philippine growth, among others.
BDO chief strategist Jonathan Ravelas, meanwhile said investors cheered Duterte’s China visit, particularly its impact on business and investments, and optimism on third quarter earnings.
But Telagen sees some investors may pocket gains as the main index hit the 7,700 resistance level.
“But since the index is already at 7,700 resistance, we might see some profit taking this week. But if it breaks that level, the index might retest the 7,800 mark. Downside risk is seen at 7,600,” Telagen said.
Asked if the surge to the 7,700 level could lead to a bullish trend, Justino Calaycay Jr., head of marketing at
A&A Securities, said: “I am looking at 7,850 to be broken to call the bulls back into play.”
The property index led gainers, up 2.39 percent.
The heavily traded issues on Wednesday were all gainers, including Universal Robina Corp., Ayala Land Inc., BDO Unibank Inc., SM Investments Corp., and Metropolitan Bank and Trust Company.
More than 1 billion, valued at P12.15 billion, were traded. Advancers outnumbered decliners, 119 to 76, while 40 traded unchanged.
On Tuesday, the bellwether PSEi leapt by 2.89 percent or 212.94 points at 7,571.15, while the All Shares rose by 2.13 percent or 92.81 points at 4,460.38.