Bargain-hunting, data lift peso, PSEi

THE stock market and the peso rebounded on Wednesday as investors hunted for bargains and took heart from fresh economic data.

The benchmark Philippine Stock Exchange (PSEi) made up for the previous day’s plunge by gaining 242.51 points, or 3.57 percent, to close at 7,035.76 while the broader All Shares added 96.77 points, or 2.69 percent, to end the day at 3.687.17

The peso, meanwhile, strengthened by 16-and-a-half centavos to P54.475 vs the dollar.

Japhet Tantiangco, senior research analyst at Philstocks Financial Inc., said robust data had raised investor confidence in the economy’s prospects.

“For January 2023, the S&P Global Philippines Manufacturing PMI (purchasing managers’ index) stood at 53.5, higher than the prior month’s 53.1,” he added.

“Meanwhile, in December 2022, the bank lending of universal and commercial banks in the Philippines, net of reverse repurchase placements with the BSP (Bangko Sentral ng Pilipinas) rose by 13.4 percent year on year.”

China Bank Securities research head Rastine Mercado, meanwhile, said the PSEi “headed sharply higher ... on reinvigorated buying appetite due to bargain-hunting following steep losses over the past two days, and due to the surge of market-onclose buying .... ”

Still, he warned of “possible weakness and volatility for the remainder of the week as investors price in policy decisions from the US Fed tonight and the European Central Bank tomorrow.”

Luis Limlingan, managing director at Regina Capital Development Corp., said positive cues from Wall Street, driven by expectations of a smaller Fed rate hike, also helped.

“US equities ended January on a good note as strong earnings and encouraging inflation data pushed the indices to their best levels since January 2019,” he added.

“Markets are expecting a 25-bps (basis points) bump from the Fed. They will announce its decision Wednesday afternoon US time, followed by Chairman Jerome Powell’s comments.”

The peso opened trading at P54.655 and traded between P54.475 and P54.67. Volume reached $958.9 million, lower than the $984.31 million in the previous session.

Meanwhile, all sectoral indices closed in the green with services posting the biggest gain of 4.34 percent.

A total of 1.06 billion shares worth about P8.99 billion changed hands.

Gainers outnumbered losers, 143 to 49, while 43 securities remained unchanged.