By James A. Loyola
The local stock market registered strong gains despite some profit-taking before the week’s close as investors cheered the lower-than-expected inflation rate for December.
Traders work beneath a monitor and an electronic ticker at the trading floor of the Philippine Stock Exchange in Bonifacio Global City (BGC), Metro Manila.(Bloomberg file photo)
The benchmark Philippine Stock Exchange index closed 80.51 points or 1.05 percent higher at 7,761.11 after late profit-taking pared gains from the day’s peak growth of 1.48 percent.
Share prices rose across the board, led by the Mining and Oil and Industrial sectors. Trading activity also picked up with 1.96 billion shares worth P9.04 billion changing hands. Advancers swamped decliners, 141-63, with 38 issues unchanged.
“Investors found a reason to be optimistic during the shortened-trading week. As tame inflation expectations pushed the market higher Thursday, its confirmation in Friday's release served a thick fodder for the market to sustain the momentum,” said Philstocks Financials Head of Research Justino Calaycay Jr.
Regina Capital Development Corporation Managing Director Luis Limlingan noted that, “investors readjusted their risk assessment of the Philippines as inflation came in much better than expected against the backdrop of a less favorable global outlook.”
“We expect inflation to improve in the coming months especially with the high base last year,” he added.
Meanwhile, Limlingan said “markets will now focus on the Federal Reserve and its interest rate policy in 2019, ahead of the Friday’s release of the Non-Farm Payroll data.”
“The PSEi surged by more than a hundred points at its intraday high, before seeing some slight profit taking at the close,” said Papa Securities Analyst Gabriel Jose Perez.
“Take note that this is also in contrast to the more than 2 percent drop that the Dow Jones and S&P500 saw last night,” he added.
Perez said that, “with positive sentiment finally here due to the aforementioned low inflation figure, and with what seems to be a comeback of foreign funds especially with today's P1.0B print, next resistance for the PSEi is around the area of 7,900 — level of previous high.”
“ However, do still continue to keep an eye out for how the US markets move as more drastic drops could still dampen the overall sentiment,” he said.
Meanwhile, most Asian markets rose Friday, reversing early losses, though Tokyo tanked more than two percent while technology firms were hit further by Apple's shock revenue warning.
The broad gains helped end a torrid week on a positive note but traders remain on edge as they face a confluence of issues including the China-US trade war, China's stuttering economy, the US government shutdown and Brexit.
Tokyo's Nikkei 225 index, which was returning from a four-day break, ended 2.3 percent down, while Sydney shed 0.3 percent and Taipei lost more than one percent. However, Shanghai finished more than two percent higher while Hong Kong was 1.8 percent up in late trade. (With AFP report)