The local stock barometer rebounded to the 8,500 level on Tuesday, tracking the recovery across US and regional markets after the bloodbath seen last week.
The main-share Philippine Stock Exchange index (PSEi) recouped 82.23 points or 0.97 percent to close at 8,570.14 on selective buying of large-cap stocks mostly by domestic bargain-hunters.
“We think the PSEi’s correction is nearing its end and recommend a trading buy,” Papa Securities said in a research note on Tuesday.
Papa Securities sees the closely-tracked Dow Jones Industrial Average continuing a short-term rally to 25,350 (from Monday’s finish of 24,601.27) which may shore up the PSEi to the 8,700 level.
“However, this will be short-term as the full effects of inflation in February will still be felt in the Philippines raising the possibility of a 25-50-basis point rise in interest rates. This is also the reason why property companies have been weak,” Papa Securities executive vice president Homer Perez said.
“In the short-term, we will probably range trade between 8,400 to 8,700. One thing which may lift the market is that foreign selling maybe abating somewhat,” he noted.
On Tuesday, net foreign selling amounted to P841.65 million compared to the previous day’s net selling of P1.27 billion.
The rebound was led by the holding firms, mining/oil and property counters which all added over 1 percent. Only the industrial counter ended lower.
Value turnover for the day amounted to P7.66 billion.
Despite the PSEi’s rebound, market breadth was negative: there were 110 decliners that edged out 96 advancers while 48 companies were unchanged.
The PSEi was lifted by property giant SM Prime, which added 3.29 percent, while BPI, Ayala Corp. and JG Summit all gained over 2 percent.
SM Investments gained 1 percent while Ayala Land, Security Bank, Megaworld, Puregold and ICTSI also firmed up.
Many investors focused on companies outside the PSEi, particularly those which had been the subject of third telecom player speculation. Now Corp., the day’s most actively traded company, surged by 29.87 percent, while TBGI rallied by 12.5 percent.
On the other hand, Jollibee and San Miguel both fell by over 2 percent while Metro Pacific and Metro Bank also slipped.
Outside the PSEi, Prime Orion (-3.56 percent) and Megawide (-2.79 percent) both declined in relatively heavy trade.
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