Stocks recover on weak China data, MSCI changes

SHARES rebounded on Tuesday on the back of weaker Chinese economic data and rebalancing of the MSCI.

The Philippine Stock Exchange index ( PSEi) closed at 8,379.64 yesterday, up 49.62 points or 0.59% and bouncing back after being down for most of the trading day.

The all-shares index closed at 4,913.91, also up 19.29 points or 0.39%.

“Funds are starting to take positions here since China reported weaker-than-expected data. The MSCI review was also a factor,” PNB Securities, Inc. President Manuel Antonio G. Lisbona said in a text message.

Chinese economic data were lower than expected, including fixed asset investment growth which between January and October slowed to 7.3%, below the 7.4% forecast.

Meanwhile, the semiannual review of the MSCI Global Standard Index saw Britannia Industries, Petronet LNG and Vakrangee included, while Apollo Hospitals has been removed.

For Luis A. Limlingan, managing director at Regina Capital Development Corp., the recovery of US stocks also boosted the local market.

“Philippine shares bounced back ahead of the ASEAN ( Association of Southeast Asian Nations) summit conclusion and the release of GDP ( gross domestic product) data. This is in line with US stocks, which slowly gained on Monday as uncertainty continued to swirl around the state of Republican tax-cut legislation,” Mr. Limlingan said in a text message.

US stocks slowly gained on Monday, recovering from the negative sentiment brought about by the uncertainty surrounding the tax reform plan of the Republican Party.

Meanwhile, third- quarter GDP data are due for release tomorrow.

“It’s possible the market may continue its upward move in the next few sessions,” PNB Securities’ Mr. Lisbona said.

Among PSEi’s six sectoral indices, industrials, holding firms, and mining and oil gained. Mining and oil went up 243.18 points or 1.98% to end at 12,513.83; holding firms climbed 99.42 points or 1.17% to 8,595.96; and industrials rose 101.02 points or 0.91% to 11,094.13.

Meanwhile, the other three subindices ended lower. Services dropped 9.39 points or 0.56% to 1,659.02; financials went down 3.9 points or 0.18% to 2,068.32; and property declined 0.07 points to close at 3,880.42.

Declining stocks outpaced advancers, 111 to 76, while 51 names closed flat. Value turnover went up to P8.88 billion from Monday’s P8.22 billion, with 889.39 million shares changing hands.

Foreigners bought shares for a net inflow of P55.46 million, a reversal of the previous session’s P1.5-billion net selling.

Most other Southeast Asian stock markets also traded cautiously on Tuesday, in line with broader Asia, as disappointing Chinese economic data and worries over US tax reforms hurt risk appetite. •