PSEi touches 7,900 mark on optimism

The benchmark Philippine Stock Exchange index (PSEi) advanced into green territory again on Wednesday on the back of progress in US-China trade talks.

The Philippines led the decline in Southeast Asian stock markets on Tuesday, ending a four-day rally with all indices in red as investors continued to trade cautiously over worries abroad.

The bellwether index closed at 7,919.67 on Wednesday, up by 2.83 percent or 217.55 points.

The broader all shares index was also up 2.02 percent, gaining 93.80 points to close at 4,727.97. All counters also firmed up, with holding firms leading with a 4.48 percent gain.

Value turnover for the day amounted to P10.170 billion. Advancers edged out decliners, 140 to 72, while 30 stocks were unchanged.

Overseas turn-out propelled the gains on Wednesday as the extended talk between the world’s two largest economies wrapped up on a positive note.

Citing bullish sentiment on the result of the talks, Regina Capital managing director Luis Limlingan said, “US Stocks rose on Tuesday as large tech companies like Apple and Amazon outperformed while investors remained cautiously optimistic Washington and Beijing could move forward on a trade deal.”

In particular, key US stocks Dow Jones and S&P 500 was up by 1.1 percent and 0.97 percent, gaining 256 points and 24 points, respectively.

Elsewhere, the talks also fueled market gains.

“The pan-European Stoxx 600 rose by more than 1 percent, with all major bourses and every sector except telecoms finishing in positive territory. Industrial stocks were the top performing sector with gains of 2 percent. The UK’s FTSE 100 rose 0.75 percent,” Limlingan added.

“President Trump addressed the nation at 9 p.m. ET, without invoking a national emergency to bypass Congress and build a border wall, which is positive overall for market sentiment. He also mentioned earlier that the trade talks between China and US is progressing well, but no details as yet.”

Relative to this, research associate from local brokerage firm Philstocks Financial Inc. Japeth Tantiangco said that Tuesday’s low performance is also a “correction for the quick surge which the local bourse experienced in the past few days.”

“Investors booked gains for the meantime while waiting for the results of the US-China trade talks,” Tantiangco said, referring to the bullish first week performance of the local market which made it the best performing in Asia during the period.

Still, he warned that domestic concerns such as trade performance remain a factor to consider.

“A wider trade deficit may cause further downward pressure for the market; a narrower one may cause the opposite,” Tantiangco said.

Trade deficit, which largely dictates the demand for the domestic stock market, further widened to P477.2 billion in the country as of end-November last year. This was 96 percent higher than the budget deficit recorded in the same period in 2017.