Stocks extend winning streak on Fed hike bets

THE Philippine Stock Exchange index (PSEi) sustained its winning streak on Thursday, tracking the movement of its Asian peers, driven by both overseas and local developments.

The PSEi added 33.83 points or 0.43% to close at 7,871.65, while the broader all-shares gauge likewise ended higher by 21.90 points or 0.46% to 4,693.39 at the closing bell.

Analysts said soft inflation data out of the United States dimmed prospects of a Federal Reserve interest rate hike in the near term, while locally, government efforts to manage the situation in Mindanao drove the market higher.

“The market continued to be up and we saw a higher trading value which was able to break the initial resistance of 7,860. First, it seemed that the issue Mindanao is simmering down after the efforts of the government to quell the conflict. Second, all regionals went up, and we followed that after US inflation is still subdued and the crude oil is moving up,” Aniceto K. Pangan, equities trader at Diversified Securities, Inc., said in a phone interview yesterday.

“As inflation in the US remains subdued, the issue on whether the Fed will increase interest rate will continue to be delayed and this trickled down to the emerging markets... The current status will be maintained, and a low interest rate environment in the US is very, very friendly to emerging economies,” he added.

Justino B. Calaycay, Jr., senior research analyst at Philstocks Financial, Inc., said: “two days in after the entire Mindanao was placed under military rule, investors have remained largely unaffected.”

“Bargain- hunting may be the key factor. A couple of index heavyweights battered over the recent past have attracted attention, value-wise,” he added.

Sectoral indices were mixed. Services rose 3.25% or 52.55 points to 1,667.06 and property climbed 1.04% or 37.40 points to 3,616.25.

Meanwhile, industrials declined 0.34% or 38.57 points to 11,182.90; holding firms went down 0.17% or 14.07 points to 7,925.87; mining and oil slipped 0.09% or 12.16 points to 12,609.83; and financials lost 0.09% or 1.86 points to close at 1,933.54.

Value turnover went up to P6.49 billion yesterday from Wednesday’s P5.90 billion, with 1.06 billion shares changing hands. Thursday saw foreign investors remain net buyers with P527.54 million, up from the previous session’s P451.81 million.

Advancers also outpaced decliners yesterday, 103 to 84, while 53 names closed unchanged. For today, Diversified Securities’ Mr. Pangan said the market will “continue to go on consolidation until it breaks the short-term high of 8,018.”

Philstocks’ Mr. Calaycay said: “We still expect the market to continue a generally sideways pattern but with a hint of upside bias.”

“Resistance is at the 7,9007,920 range, and extensions past that line may invite profit-taking over the short term,” the analyst added.