Stocks extend rally on bullish GDP expectations
STOCKS continued to rally, with the main index breaching the 7,500 mark on Wednesday, driven by optimism on the country’s gross domestic product (GDP) growth for the first quarter.
The broader all-shares index likewise surged to 4,511.77, rising 1.14% or 51.21 points from yesterday’s trading.
“The most telling sign was the government’s optimism, with the National Economic and Development Authority’s projection of 7% year-on-year growth [in the first quarter],” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a text message.
A newspaper report earlier this week said NEDA Director-General and Socioeconomic Planning Secretary Ernesto M. Pernia expects the economy to have expanded by about 7% in the first quarter. The government is targeting a 6.5-7.5% GDP growth for this year following last year’s 6.8% expansion.
Official first quarter GDP data will be released next month.
“Market experienced bullish continuation from [Monday’s] initial move. Local investors are again in buying mode as an anticipated bearish outlook failed to materialize. Adding fuel to the fire was the noticeable increase in foreign buying activity,” Angping & Associates Securities, Inc. equity analyst Frank Gerard J. Barboza said.
Foreign buyers outpaced sellers yesterday, with net foreign purchases coming in at P1.25 billion, although down from Tuesday’s net P4.08 billion.
All counters reflected the day’s positive trajectory, as property led with an increase of 2.82% or 91.21 points to 3,316.28, followed by financials which rose 2.07% or 38.78 points to 1,904.71.
Industrials likewise went up by 1.36% or 149.31 points to 11,113.88; holding firms climbed 1.04% or 78.34 points to 7,605.84; services added 0.99% or 15.78 points to 1,600.79; and mining and oil gained 0.59% or 71.92 points to 12,215.20.
Advancers beat decliners, 111 to 75, while 48 stocks were unchanged. Value turnover stood at P10.78 billion as 1.69 billion shares changed hands, from Tuesday’s P11.94-billion worth.
“On a purely technical standpoint, the PSEi has broken new ground this year, finally piercing through the 7,400 level and investors are anticipating a higher trading range,” Regina Capital’s Mr. Limlingan said, adding that he expects the main index to move within 7,430 to 7,700 in the coming days.
Angping & Associates’ Mr. Barboza said trading might continue in this direction, saying “we might again see some more of this bullishness going to the end of the week until overbought territory again.”
In contrast, most Southeast Asian shares fell on Wednesday as cautious investors kept to the sidelines ahead of a crucial meeting on Thursday between US President Donald J. Trump and his Chinese counterpart Xi Jinping. -- A.B. Francia with Reuters