Stocks surge on growing optimism; PSEi registers biggest gain in 7 days

The local stock market continued to rally, riding on growing optimism that the situation is improving for the global economy.

The Philippine Stock Exchange index (PSEi) surged 271.84 points, or 4.35 percent, to close at ₱6,517.49 banks and conglomerates leading the charge, posting its biggest gain in seven days.

Volume leapt to 2.2 billion shares worth ₱11.52 billion as foreign funds return to the market with gainers double the number of losers at 132 to 65 with 42 unchanged.

“Philippine stocks finished higher, adding to several sessions of gains as economic data pointed to less severe damage from the COVID-19 pandemic than feared, leaving major equity benchmarks at their loftiest levels since early March,” said Regina Capital Development Corporation Managing Director

Luis Limlingan.

Expectations of a shorter contraction are building since lockdowns in Manila and neighboring areas have eased starting June 1.

A sustained climb for the Philippine index above 6,100 is a signal that “the rally has still some gas to test the 6,500,” according to

BDO Unibank Chief Market Strategist Jonathan Ravelas.

Philstocks Financial Research Associate Piper Tan said the rally in the US is spilling off here noting that average value turnover for the past seven trading days is at around ₱9 billion against the year-to-date average of ₱6.36 billion “which is a clear indication of investors going into the market.”

“On our shores, this is a positive response to the partial opening of the economy caused by

GCQ implementation in

NCR which will technically restart the economy and also valuations are attractive to investors.”

However, Tan warned that, “I’m getting cautious at this point and I think this is prone to profit-taking due to valuations and geo-political tensions here in Philippines (AntiTerror Bill) and the series of protests in the US (George Floyd).”

“I’m actually skeptical about this rally. At some point it will correct,” said Tan noting that the COVID-19 vaccine may still take some time to develop and produce.

Growing optimism about a swift global economic recovery pushed equity markets sharply higher Wednesday, as investors took heart from further easing of lockdowns while looking past China-US tensions and civil unrest across America.

The upbeat mood — and hopes for an extension to a massive oil output cut agreement — resulted in Brent crude futures breaking the $40 mark for the first time in nearly three months, before profit-taking kicked in. (With AFP Report)