Shares eke out gain after BoJ policy statement

THE STOCK MARKET managed to wipe out early losses to post a gain on Wednesday, after the Bank of Japan (BoJ) unveiled a modified policy framework to tackle deflation and revive the world’s second largest economy.

The benchmark Philippine Stock Exchange index ( PSEi) edged up by 3.70 points or 0.04% upward to 7,675.42 when trading closed. The broader all-shares likewise advanced 6.79 points or 0.14% to 4,570.34.

“Apparently, there was a positive response from the BoJ move, so the main index wiped out the morning losses,” Ralph Christian G. Bodollo, equity research analyst at RCBC Securities, Inc., said in a telephone interview.

Local stocks traded broadly downward earlier in the session, as investors awaited monetary policy announcements from Japan and the United States, Mr. Bodollo noted.

The PSEi opened at 7,686.26 — an intraday high — before stumbling to as low as 7,632.25 within the morning session.

Reuters reported that BoJ decided to adopt a “yield curve control” instead of a base money target under the revamped framework that entails buying long-term government bonds to keep 10-year bond yields at current levels around zero.

“Afternoon session saw Japan stimulate with some bond buying but said it would not drive rates lower. This caused some rally from Asian markets,” Juan G. Barredo, vice-president of sales and customer support at COL Financial Group, Inc., said in a mobile phone message.

Most sectors managed to settle in the green when trading ended on Thursday, with 105 names advancing, 82 declining and 54 remaining steady.

Mining and oil stocks rose by 172.16 points or 1.61% to 10,864.58; property by 15.67 points or 0.45% to 3,429.04; industrial by 32.74 points or 0.27% to 11,939.70; and financials by 1.10 points or 0.05% to end yesterday’s session at 1,855.09.

Services, on the other hand, declined by 11.60 points or 0.75% to 1,522.61. Holdings firms ended 6.67 points or 0.08% lower at 7,605.94 after its rebound during the afternoon session fell short.

Mr. Bodollo, however, noted that many investors opted to stay on the sidelines until the US Federal Reserve announces the outcome of its monetary policy review later on Wednesday.

Value turnover settled below the P8-billion mark although it increased to P7.39 billion, after 1.11 billion issues exchanged hand, from the P6.38 billion recorded on Tuesday.

Net foreign selling also dropped to P348.82 million from P372.53 million

“Markets are volatile ahead of the Fed meeting, but selling pressure this week was abated. I suppose funds don’t want to move in a big way right before the Fed meeting,” Miguel A. Agarao, investment analyst at Wealth Securities, Inc., noted in a mobile phone message.