PSE index rises on hopes of economic recovery

STOCKS continued to rise on Wednesday on investor optimism following the slower inflation print recorded last month.

The Philippine Stock Exchange index (PSEi) rose by 61.6 points or 0.93% to close at 6,651.71 on Wednesday, while the broader all shares index went up by 41.94 points or 1.04% to 4,044.94.

“Investors chose to be optimistic despite concerns of an extended lockdown due to surging COVID-19 (coronavirus disease 2019) cases,” AAA Southeast Equities, Inc. Research Head Christopher John Mangun said via e-mail.

“Inflation figures for the month of March, which came in lower than the month before, has given investors some hope that prices of commodities have started to stabilize, soothing fears of runaway inflation which would hurt the struggling economy further. The lack of selling prompted bargain hunters to look for opportunities in battered issues,” Mr. Mangun added.

Headline inflation was at 4.5% in March, the Philippine Statistics Authority reported on Tuesday, slowing from the 4.7% print in February but faster than the 2.5% seen in March last year.

Inflation averaged at 4.5% for the first quarter, beyond the central bank’s 2-4% annual target as well as its 4.2% forecast for 2021.

Meanwhile, Timson Securities, Inc. Trader Darren T. Pangan said the gains posted by the PSEi also reflected offshore developments.

“The market ended higher together with most Asian markets, on growing optimism over the world’s economic recovery, especially after the IMF (International Monetary Fund) lifted their outlook on their global growth forecast,” Mr. Pangan said in a Viber message.

Majority of the PSEi’s sectoral indices went up on Wednesday, except for mining and oil, which dropped by 53.09 points or 0.61% to 8,529.01.

Meanwhile, property gained 81.42 points or 2.52% to 3,312.83; holding firms improved by 43.71 points or 0.64% to finish at 6,800.23; industrials went up by 44.66 points or 0.5% to 8,935.95; services increased by 5.59 points or 0.39% to 1,439.22; and financials inched up by 5.3 points or 0.38% to close at 1,390.04.

Value turnover decreased to P6.05 billion on Wednesday with 3.41 billion shares switching hands, from the P5.85 billion with 2.42 billion issues traded on Tuesday.

Advancers outnumbered decliners, 147 against 57, while 46 names closed unchanged.

Net foreign selling climbed to P667.2 million on Wednesday from P551.88 million in the previous trading day.

“Thursday being the last trading day of the week, significant support may be drawn at the 6,400 area, while next resistance may be set at the 6,950 level,” Mr. Pangan said. Financial markets are closed on Friday in observance of the Day of Valor.

“PSEi is currently up 3.2% for the week, and although we may see some profit taking on the last trading day, it may still end with some gains for the week,” AAA Southeast Equities’ Mr. Mangun added. — Keren Concepcion G. Valmonte