Optimism returns as PSEi passes 7,400

Optimism returned to the market yesterday, enough to push the index past the 7,400 level, buoyed by rosy economic data from the US.

The benchmark Philippine Stock Exchange index (PSEi) gained 69.69 points, or 0.94 percent, to settle at 7,451.37 while the broader All Shares index gained 27.13 points, or 0.60 percent, to close at 4,492.51.

It was even better for the sectoral indices which all closed in positive territory with the property and the holding firms leading the gainers.

Total value turnover, however, was still thin at P4.253 billion, indicating that some investors are still hesitant to return to the market.

Market breadth was positive as gainers outnumbered losers 108 to 76 while 52 issues did not move.

Gio Perez of Papa Securities said the index traded strongly, breaking past the 7,400 psychological resistance early in the morning as it may have drawn from the positivity of the US markets last night.

US markets rose as data showed that industrial production rose 0.6 percent in June to more than offset a similarly sized decline in May.

“The index was also bought up at the close to push it to close at its high for the day. We should also scrutinize the net foreign flow. Despite the official figure showing a net foreign buying of P203.8 million, there was a large block of Xurpas shares bought by foreigners worth P418 million. Without the Xurpas block, foreign flow would have been its usual net selling of P214.3 million,” he said.