PSEi breaches 7,000-pt level in intra-day trading

MANILA, Philippines - ThePhilippine Stock Exchange index (PSEi) broke through the 7,000-point level for the first time this year, fuelled by the continued optimism in global equity markets, analysts said.

The Philippine Stock Exchange index gained 0.53 percent or 36.82 points to close at a fresh 13-month high of 6,999.10 despite retreating from an intraday high of 7,016.71. It marked the best closing of the main index since finishing at 7,021.95 on May 31, 2013.

The broader all shares index rose 0.50 percent or 20.83 points to 4,180.32.

“Basically, we felt the fireworks in the US. There continues to be good news like jobs and trade data coming from them,” said Astro del Castillo, managing director of First Grade Finance Inc.

While US financial markets were closed on Friday for the Independence Day holiday, the carryover optimism benefited local stocks, said Jose Mari B. Lacson, head of research at stock brokerage Campos, Lanuza & Co.

“Regardless of all other factors to which market’s seemingly unbridled advance to near-record levels are attributed to, the underlying motive force underlining the extension of the bull market to a fifth year is liquidity and interest rates,” said Justino Calaycay Jr., an analyst at Accord Capital Equities Corp.

Calaycay said investor confidence was high as US markets posted fresh record highs while other global indexes are treading multiple-year peaks.

On Thursday, the Dow Jones industrial average advanced 0.54 percent or 92.02 points to 17,068.26, while the broader Standard & Poor’s 500 index picked up 0.55 percent or 10.82 points to 1,985.44, both fresh record highs, on the back of a strong jobs report in June.

Locally, all counters, save for mining and oil that eased 0.62 percent or 104.31 points to 16,639.44, were in the green. The gainers were led by property firms that climbed 0.94 percent or 24.93 points to 2,679.22.

The value of shares that changed hands slightly fell to P8.31 billion from P8.82 billion on Friday. Advancers outplayed decliners, 114 to 74, while 42 stocks did not change.

Most active stocks closed in the positive territory, led by index heavyweight PLDT (+0.13 percent) while Megaworld Corp. (+3.28 percent), Globe Telecom Inc. (+1.59 percent) and Cebu Air Inc. (+0.60 percent) posted gains. But SM Prime Holdings Inc. (-0.24 percent) and Energy Development Corp. (-0.80 percent) closed lower yesterday.

The bullish momentum remains in the local stock market but the retreat late in the trading session indicates a possible profit taking that might pull the main index back to the 6,800-6,900 level, del Castillo said.

For Calaycay, the market now faces two main challenges: keep the measure above the 7,000 line and push it further toward the all-time record high.

“Except for high price-to-earnings valuations and the extended bull market putting pressure on the technical view, the backdrop for equities support an optimistic forecast,” Calaycay said.