PHILIPPINE STOCKS surged on Tuesday on sustained bargain hunting and data showing manufacturing activity in the country improved last month.
The benchmark Philippine Stock Exchange index (PSEi) rose by 204.57 points or 3.53% to close at 5,987.72 on Tuesday, while the broader all shares gained 96.35 points or 3.09% to end at 3,210.48.
“The local bourse extended its gains amid continued bargain hunting, boosted by the improvement in the manufacturing sector,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.
Ms. Alviar, however, noted that value turnover remained low, showing that the rally was “weak and may not be sustainable in the short run.”
Value turnover climbed to P4.59 billion on Tuesday with 514.19 million shares changing hands from the P3.95 billion with 613.35 million issues traded on Monday.
“Philippine investors continued bargain hunting on the second trading day of October, finishing in the green once more. Market moves were brought by the easing of Treasury yield. The 10-year Treasury note particularly fell to about 3.65%, down from more than 4% at one point last week,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“On the local economic front, factory output catapulted to a three-month high in September on more robust demand,” Mr. Limlingan said.
The Philippines’ manufacturing sector expanded for an eighth month in a row in September, as better demand led to growth in output and new orders, S&P Global said on Monday.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) reading stood at 52.9 in September, rising from 51.2 in August and the seven-month low of 50.8 in July.
A PMI reading above 50 denotes improvement in operating conditions compared with the preceding month, while a reading below 50 signals deterioration.
S&P Global said the Philippines’ manufacturing PMI was the fastest in three months, mostly due to moderate improvements in output and new orders.
However, it noted that growth might have only been driven by domestic demand, as foreign demand contracted for the seventh straight month. This reflected a slump in demand from China and other major economies amid a global slowdown.
All sectoral indices closed higher on Tuesday. Holding firms surged by 262.82 points or 4.72% to end at 5,820.44; property rose by 103.55 points or 4.19% to 2,573.52; mining and oil climbed by 386.99 points or 3.75% to 10,699.39; industrials went up by 311.83 points or 3.63% to 8,897.31; services gained 22.09 points or 1.47% to close at 1,522.86; and financials added 21.24 points or 1.44% to end at 1,496.21.
Advancers outnumbered decliners, 140 to 60, while 40 names closed unchanged.
Net foreign selling declined to P96.45 million from P691.88 million on Monday.
Philstocks Financial’s Ms. Alviar placed the PSEi’s support at 5,700 and resistance at 6,000-6,100. — AEOJ