Property issues lead PSEi back to 8,000 level

Share prices surged to push the Philippine Stock Exchange index (PSEi) to near its one-year high, propelled by property stocks on anticipation that the US Federal reserve will keep interest rates unchanged.

In early trades, the PSEi moved back north of the 8,000 level and breached the 8,046 resistance to around 8,060 intraday (highest since August 11, 2016) and putting it within striking distance of its all-time high of 8,136.

However, some profit-taking ensued and pared some 90-point gain resulting in the PSEi advancing 65.79 points to end the day at 8,037.51.

“It looks like a breakout is unfolding. It's breaking out from the 7,700-8,000 consolidation levels. This seems to be driven by positive sentiments that PRRD's economic reforms and fiscal reforms will be passed soon," BDO Unibank Chief Market Strategist Jonathan Ravelas said.

He added that expectations of better second quarter earnings is pushing prices higher.

Almost all sectoral indices advanced, led by the property index, with only the industrial sector in the red as 1.8 billion shares worth R8.2-billion changed hands. Advancers managed to beat losers at 98 to 94 while 60 issues were unchanged.

The Fed was to conclude its two-day meeting after the closing of the day’s trades, and is widely expected to keep interest rates unchanged. The focus will be on the Fed's statement, with markets looking for signs of when the central bank will begin paring its massive bond holdings and next raise rates.

RCBC Securities equity analyst Jeffrey Lucero noted that local companies will report their earnings soon and there's general optimism in the market that property stocks are going to meet the consensus.

Megaworld Corporation surged 5.51 percent to R4.98 a share; Ayala Land rose 1.74 percent to a record high of R43.95 per share, for its fifth straight session of gains; while SM Prime Holdings climbed as much as 1.76 percent to close at R34.75 a share.

Meanwhile, US stock indexes returned to records Tuesday as corporate profits continue to come in better than analysts expected, AP reported.

The Standard & Poor's 500 rose 7.17 points, or 0.3 percent, to an all-time high of 2,477.08. It was the first gain for the index in four days.

The Dow Jones industrial average rose 100.26, or 0.5 percent, to 21,613.43. The Nasdaq composite added 1.37 points, or less than 0.1 percent, to 6,412.17, and the Russell 2000 index of small-cap stocks gained 12.33, or 0.9 percent, to 1,450.39. Both the Nasdaq and Russell set records.