(UPDATE) Stocks bull on improving investor sentiments

MANILA, Philippines (Xinhua) - Buying continues today in the Philippine stock market as investor sentiments improved after the index breached the 7,000 level.

The bellwether Philippine Stock Exchange index added 0.27 percent or 19.07 points to 7,027.58, while the broader all-share index managed to inch higher by posting a 0.08 percent gain or 3. 40 points to 4,171.72.

Trading volume reached 1.56 billion shares worth P8.25 billion ($188.14 million) with 118 stocks declining, 70 advancing, and 41 were unchanged.

AB Capital Securities, Inc. said there was a follow-through buying after the PSEi breached the 7,000-mark last week.

This, it said, was due to the fact that many portfolio managers will have to adjust their funds to replicate the new equity weighting until the rebalancing of the local equities becomes effectivity on September 1, 2014.

"On a technical basis, the Moving Average Convergence Divergence indicator has recently broke out from its negative divergence due to the recent run-up of the market. As the former resistance at the 7,000 level has recently been turned into a support, we become a little more optimistic for the direction of the market, although we warn that a breach of this resistance- turned- support level could pull the market back to 6,875," it said.

Investors, it said, are advised to prudently take profits and cautiously accumulate at bargain prices.

Corporate earnings and foreign updates remain as market catalysts and investors are likely to adopt a cautious stance, it said.

Stocks in the 30-company index closed mixed. The most actively issues, namely heavyweight Philippine Long Distance Telephone Co. and Alliance Global Group, Inc. were sold down.