Local stocks rally above 7,500 on US market gains

The local stock market rose to the 7,500 level after breaching the 7,480 resistance even though most Asian markets were mixed.

The main index gained 66.98 points or 0.90 percent to close at 7,514.00 although the Industrial and Minnig and Oil sectors declined. Trading activity increased substantially with 1.4 billion shares worth 16.9 billion changing hands.

Profit-taking ensued in the afternoon session, after the PSEi pulled off a breakout in morning trade, gaining 129.93 points towards 7,576.95 – rallying past its month-long resistance of 7,480 and its 50-day moving average of 7,445.41. Advancers swamped decliners, 125-72, with 48 issues unchanged.

“Philippine equities finished even stronger start even after yesterday's stellar close. Most of this was because of terrific kick-off to earnings season in the US,” said Regina Capital Development Corporation Managing Director Luis Limlingan.

In particular, Limlingan said “the Nasdaq rallied on the open after a set of good earnings from Google but tailed off towards the end. Dow Jones kept up with the rally with commodities leading the pack.”

Markets in Southeast Asia also cheered China's potential fiscal move, with Asia shares ex-Japan rising for a second straight session.

China will adopt fiscal policy measures, including cutting taxes for companies and speeding up local governments' special bond issuance, to help tackle external uncertainties without resorting to strong policy stimulus, state radio said on Monday.

“The once resilient upper limit of 7,480.00 now turns into a transient support for the index, with strength ready to be tested soon,” said RCDC which also warned of the “risk of potential quick profit taking in the coming days.”