SHARES climbed on Wednesday on dovish remarks from the US Federal Reserve chief and as the market remained hopeful the Philippine economy could be reopened further.
The 30-member Philippine Stock Exchange index (PSEi) went up by 48 points or 0.69% to close at 6,918.41 on Wednesday, while the all shares index rose by 20.69 points or 0.49% to end at 4,203.59.
“With most of the regional markets continued on the uptrend after US Fed Chairman Jerome Powell’s testimony on Congress revealed that US inflation was mainly caused by [a] sudden upsurge in consumer demand tied to the reopening of economy though persistent but will wane over time as it is transitory, [the] local market followed and sustained its upward momentum,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.
Mr. Powell on Tuesday reaffirmed the US central bank’s intent to encourage a “broad and inclusive” recovery of the job market, and not to raise interest rates too quickly based only on the fear of coming inflation, Reuters reported.
“We will not raise interest rates pre-emptively because we fear the possible onset of inflation. We will wait for evidence of actual inflation or other imbalances,” Mr. Powell said in a hearing before a US House of Representatives panel.
“The PSEi advanced led by substantial gains in large-cap property firms, port-operator ICT (International Container Terminal Services, Inc.), and fastfood giant JFC (Jollibee Foods Corp.), AAA Southeast Equities, Inc. Research Head Christopher John Mangun said in an e-mail, adding the performance of mentioned stocks is consistent with the economy’s reopening.
“Trading volumes remain below average and declined further which may be a sign that most investors are on the sidelines, looking forward to the results of the central bank’s meeting which will be out by the end of the week,” Mr. Mangun added.
Value turnover increased to P6.14 billion with 4.2 billion shares switching hands on Wednesday, from the P5.22 billion with 2.55 billion issues traded the previous day.
All sectoral indices posted gains on Wednesday. Property went up by 60.3 points or 1.79% to 3,412.18; services improved by 14.07 points or 0.9% to 1,574.10; mining and oil climbed 83.07 points or 0.89% to 9,340.20; industrials gained 58.96 points or 0.62% to finish at 9,479.34; financials bumped up by 1.98 points or 0.13% to 1,488.09; and holding firms inched up by 6.65 points or 0.09% to 6,922.54.
Advancers outperformed decliners, 116 versus 94, while 52 names closed unchanged. Net foreign selling surged to P1.44 billion on Wednesday from P101.57 million on Tuesday.
“With the fears allayed by the US Fed Chairman, we may see the market retest the index 7,000 psychological resistance level,” Diversified Securities’ Mr. Pangan said.
“The rebound has confirmed the PSEi’s immediate support at 6,780,” AAA Southeast Equities’ Mr. Mangun said. “It may continue to trade between this… and resistance at 7,000 until the end of the week.” — KCGV with Reuters