The Philippine Stock Exchange index (PSEi) surged on Monday back to the 7,300-points level on market expectations for a favorable gross domestic product (GDP) result later this week and China’s surprise rate cut late last week.
The bellwether stock index toned down its gains from early trade but still closed up 48.95 points or 0.67 percent at 7,325.13. The broader All Shares index also jumped 0.51 percent or 21.98 points to 4,300.37.
DA Market Securities Inc. said in its daily market report that buying at the start of the week was attributable to anticipation of favorable economic data due to be announced on Thursday.
Investors remain hopeful that the government will announce favorable GDP numbers despite consensus estimates of a below-target third quarter growth rate, or a GDP figure at the low end of the government’s target range of 6.5 percent to 7.5 percent.
“The index looks poised to make fresh highs as we head into the seasonally positive yearend [December] and start of the year [January to February]. The strategy is to buy selectively on dips,” DA Market said.
Jason Escartin, investment analyst at F. Yap Securities Inc., said the market was also influenced by the China central bank’s “move to reduce benchmark borrowing and lending rates”, which encouraged buying by fund managers during Monday’s trading session, which is seen to last throughout the week.
“The China central bank’s move to reduce benchmark borrowing (-25 bps at 2.75 percent) and lending rates (-40 bps at 5.6 percent) could inspire portfolio fund managers to buy this week, supporting calls for continued stimulus [measures]to boost economic activity region-wide,” Escartin said.
DA Market said China’s move is also expected to lift the Dow Jones higher this week, which can also influence local trades.
“Large-cap properties and financials may take the lead, as well as holding firms with good line-ups next year. Mining and oil-related stocks might also benefit from the recent uptick in crude futures prices,” Escartin added.
All sectors finished in the green on Monday. Financials were up 1.80 points or 0.10 percent at 1,730.19, industrials advanced 143.17 points or 1.22 percent to 11,922.10, and holding firms added 8.14 points or 0.13 percent to 6,316.76.
Services climbed 13.58 points or 0.63 percent to 2,159.09, mining and oil soared 243.81 points or 1.56 percent to 15,893.12; and property jumped 34.33 points or 1.19 percent to 2,913.58.
The day’s active losers were Southeast Asia Cement Holdings Inc and SM Investments Corp. while the rest were gainers. Among the top gainers were Universal Robina Corp., PLDT, Ayala Corp. and BDO Unibank Inc.
Total volume traded was 5.32 billion shares valued at P7.06 billion. Advancers outnumbered decliners 99 to 80, while 47 shares were unchanged.
On Friday last week, the benchmark PSEi went up 7.23 points or 0.10 percent to 7,276.18, while the wider All Shares index added7.21 points or 0.17 percent to 4,278.39.