Stocks rise on improved manufacturing activity

PHILIPPINE SHARES rose on Wednesday on improved manufacturing activity last month and as strong earnings of listed companies continued to boost market sentiment.

The bellwether Philippine Stock Exchange index (PSEi) rose by 52.81 points or 0.85% to end at 6,206.24 on Wednesday, while the broader all shares index went up by 19.72 points or 0.6% to finish at 3,277.01. 

China Bank Securities Corp. Research Analyst Lance U. Soledad said the PSEi’s rise was driven by the continued expansion of the country’s manufacturing sector in October.

“Surge in market-on-close buying led to the index closing above the 6,200 resistance level. Buying appetite for today may have been buoyed by the continued expansion of the country’s manufacturing sector in October,” Mr. Soledad said in an e-mail on Wednesday.

S&P Global said in a report that manufacturing activity posted a modest expansion in October.

The S&P Global Philippines Manufacturing purchasing managers’ index (PMI) stood at 52.6 in October, slowing from 52.9 in September but remaining above the 50 mark that separates growth from contraction.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said that the third-quarter results of some listed firms also boosted market sentiment.

“Investors made bets ahead of the main highlight this week, which is the Fed’s (US Federal Reserve) latest policy decision at the conclusion of its meeting on Wednesday,” Mr. Limlingan said in a Viber message. 

“Back home, the key economic data for this shortened week are the S&P Global Manufacturing PMI, which came out with a slight contraction today, as well as the October inflation rate,” Mr. Limlingan added.

AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message that local shares closed higher on Wednesday on earnings optimism. However, the PSEi “erased most of its early gains as investors took profit ahead of Fed’s policy rate decision due out tonight.”

Sectoral indices ended mixed on Wednesday. Property went up by 91.10 points or 3.54% to 2,663.85; holding firms gained 90.04 points or 1.51% to end at 6,023.41; and financials rose by 6.90 points or 0.43% to 1,595.04.

Meanwhile, services went down by 27.79 points or 1.74% to 1,564.54; mining and oil declined by 39.38 points or 0.40% to 9,763.57; and industrials dropped by 10.86 points to 0.12% to 8,977.04.

Value turnover rose to P6.29 billion on Wednesday with 496.31 shares changing hands from the P4.21 billion with 421.67 million issues traded on Oct. 28.

Advancers beat decliners, 105 versus 74, while 47 names closed unchanged.

Net foreign buying stood at P580.99 million on Wednesday, a reversal of the P41.54 million in net selling on Oct. 28.

China Bank Securities’ Mr. Soledad placed the PSEi’s support at 6,000-6,050 and resistance at 6,380, while AP Securities Mr. Temporal put support at 5,900 and resistance at 6,300. — AEOJ