Stocks rise on bargain hunting, easing virus fears

By Keren Concepcion G. Valmonte

PHILIPPINE stocks inched up on Wednesday as investors hunted for bargains and fears about a fresh surge in coronavirus infections eased.

The benchmark Philippine Stock Exchange index (PSEi) went up by 50.66 points or 0.78% to close at 6,497.01. The broader all-share index increased by 21.61 points or 0.55% to 3,934.93.

“The PSEi continued higher on less selling pressure and declining trading volumes,” Christopher John J. Mangun, research head at AAA Southeast Equities, Inc. said in an e-mail.

“The sentiment has improved as fears of the government losing control over the pandemic situation has subsided,” he added.

The bump was likely due to bargain-hunting in oversold issues, China Bank Securities Corp. Research Head Rastine Mackie D. Mercado said.

“However, further upside appears limited from a technical perspective as the 6,500 resistance is now overhead,” he said in an e-mail.

Majority of the sectoral indices closed higher on Wednesday except for mining and oil, which fell by 8.39 points or 0.1% to 8,230.73.

Meanwhile, services increased by 25.79 points or 1.82% to finish at 1,440.18, while industrials rose by 102.75 points or 1.22% to end at 8,492.96. Property stocks rose by 35.75 points or 1.11% to 3,233.4, financials improved by 10.55 points or 0.75% to close at 1,415.28 and holding firms gained 5.25 points or 0.08% to 6,517.98.

Value turnover soared to P21.32 billion, with 9.27 billion shares switching hands from P5.04 billion with 2.3 billion issues traded on Tuesday.

Decliners outperformed advancers 98 against 90, while 64 shares closed unchanged.

Net inflows reached P371.67 million, a reversal from the P690.22 million in net foreign selling on Tuesday.

The increase in trading volume may also be traced to the debut of the real estate investment trust (REIT) of DoubleDragon Properties Corp. at the local bourse. It was only the second REIT to be listed on the PSE.

“It started slightly higher, but then returned and closed at its initial public offering price,” Mr. Mangun said. “It may have been affected by the current risk off sentiment of investors due to market conditions.”

Market weakness was expected in Thursday’s trading session. Investors were expected to remain cautious until there are better signs of improvement in the country’s COVID-19 situation.

“We also note that upside is likely to be tempered over the near term as the possibility of more restrictions continue to be in play,” Mr. Mercado said.

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