Share index rebounds on bargain hunting

PHILIPPINE share prices rebounded on Tuesday as investors cheered reports that the Bangko Sentral ng Pilipinas (BSP) hinted at keeping interest rates low to support economic growth coupled with progress in Greek debt-swap talks.

At the Philippine Stock Exchange (PSE), the benchmark index closed 37.95 points or 0.82 percent to 4,682.44, while the broader all-shares index grew 28.01 points or 0.89 percent to 3,175.47. Advancers beat decliners, 109 to 57, while 39 stocks were unchanged. A total of 3.497 billion stocks worth P16.16 billion changed hands.

“Bargain hunters dominated today’s session, seizing buying opportunities following the PSEI’S latest correction,” said Freya Natividad, investment analyst at 2Tradeasia.com

“The market has been afloat in the last few days, but I guess investors were inspired by the announcement of the BSP that there’s more room for a rate cut,” said Astro del Castillo, managing director of First Grade Finance Inc. BSP Governor Amando Tetangco Jr. said that the central bank will “ensure that policy settings are appropriately accommodative of noninflationary growth” after the economy grew 3.7 percent in 2011.

“At the start of trading, a cautious tone was slightly felt as investors searched for firmer leads overseas, particularly in the euro zone,” Natividad said. After the European Union summit in Brussels, Greek Prime Minister Lucas Papademos said that the nation aims to complete debt-swap negotiations with bondholders over the restructuring of 200 billion euros of debt by the end of this week.

Overnight, the Dow Jones industrial average dropped 6.74 points or 0.05 percent, to 12,653.72.