The benchmark stock exchange index returned to the 7,000 level on Tuesday, fuelled by bargain-hunting and regional gains.
The Philippine Stock Exchange index (PSEi) rose by 1.93 percent or 133.53 points to 7,060.60, while the wider All Shares index also gained by 1.44 percent or 57.44 points to 4,054.35.
Jonathan Ravelas, BDO chief market strategist, said the market had rebounded from Friday following a Monday holiday break,
“Today’s market is seen as a technical rebound following last week’s drop,” Ravelas said in a text message.
The rise does not necessarily mean a Christmas rally, he said, with “a break above 7,100 to 7,150 levels … needed to break the bearish bias in the near term.”
“Otherwise, the market will just continue to see a retest of the 6,800 levels.”
Joylin Telagen of IB Gimenez Securities Inc. said bargain hunting and positive Japanese factory data contributed to the rally.
“It is a bargain hunting of selected stocks after last month’s PSEi aggregate third quarter earnings was down by 3.6 percent compared to the same quarter last year,” she said.
“[The Japanese data] helped too, as Japan is our biggest export destination. Improvement in Japan is also positive to Philippine exports,” Telagen added.
Japan’s factory output continued to expand in October, data released on Monday showed, in a sign that a recession could be short-lived.
Regional markets discounted reports on Tuesday that China manufacturing was at its weakest in three years, focusing instead on the yuan’s inclusion in the International Monetary Fund’s currency basket.
Telagen said that over the next few days, investors would continue to act on various data releases.
“On Thursday, [US Federal Reserve Chairperson] Janet Yellen will appear on joint congressional meeting. We expect that she might give possible hint on a rate hike. Also non-farm payrolls and unemployment are due on Friday before the Fed meeting on December 15 to 16,” she said.
Of the stock market’s subsectors, only industrial slipped, falling by 0.41 percent. Gaines were led by services and property, which increased by 2.55 percent and 2.68 percent, respectively.
Total volume traded hit 1.718 billion shares valued at P9.9 billion. Gainers outnumbered losers, 104 to 68, while 42 issues did not change.
Last Friday, the bellwether PSEi dropped 136.18 points or 1.93 percent to 6,927.07 while the wider All Shares index lost 59.69 points or 1.47 percent to 3,996.91.