PSEi rallies ahead of Fed meet as SMIC rebounds

STOCKS rallied on Monday after SM Investments Corp. (SMIC) bounced back from last week’s losses, easing trading woes late last week.

The bellwether Philippine Stock Exchange index jumped 1.21% or 86.82 points to close at 7,233.09 yesterday. The broader all shares index also climbed 0.82% or 35.62 points to 4,379.01.

“The local market rebounded led by a rally in SMIC, which climbed 7.76% today, after it was sold off heavily last Friday,” Luis A. Limlingan, managing director at Regina Capital Development Corp., said in a text message on Monday.

“The counter regained most of what it lost last Friday, as the effects of an index [rebalancing] prompted funds managers to lighten up on the stock,” Manuel Antonio G. Lisbona, president of PNB Securities, Inc., said in a mobile phone message.

Regina Capital’s Mr. Limlingan added that the anticipated interest rate hike by the Federal Reserve this week now “looks like a forgone conclusion,” with the upward adjustment already factored in by the market.

Another driver for yesterday’s trading was the jobs report released by the US Labor Department last Friday, Mr. Limlingan noted. US nonfarm payrolls increased 235,000 in February with a 9,000 upward revision to the prior two months, moderately above consensus expectations. Meanwhile, US unemployment edged down to 4.7%.

Holding firms led the charge, increasing 1.90% or 134.89 points to 7,223.11; mining and oil went up 1.04% or 128.67 points to 12,476.03; property gained 0.84% or 27.34 points to 3,275.82; financials climbed 0.66% or 11.92 points to 1,816.26; industrials rose 0.60% or 66.42 points to 10,973.57; and services inched up 0.20% or 2.94 points to 1,465.68.

Advancers and decliners ended at 94 apiece, while 43 names were unchanged. Value turnover was at P6.46 billion, down from Friday’s P8.01 billion, with 1.43 billion shares changing hands.

Net foreign selling persisted at P282.06 million, although below the previous trading day’s P617.97-million outflow.

Other Southeast Asian markets saw tepid trading as investors braced themselves after Friday’s strong US jobs data sealed the chance of a rate increase by the Fed on Wednesday.

Fed Chair Janet L. Yellen signaled last week that the US central bank would likely hike rates at its March 14-15 policy meeting.

MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.75% at 0402 GMT. The Singapore index rose about 0.4%, helped by gains in financials and telecommunication stocks.

Vietnam fell as much as 0.6%, bogged down by weak consumer staples and financials. Vietnam’s coffee export volume this year is expected to fall 20-30% from a year earlier due to drought and reduced inventory, an industry official said on Sunday.

The Jakarta SE Composite Index was flat with the index of the 45 most liquid stocks trading rangebound.