The local stock market surged past the 7,000 level as investors celebrated positive reports on breakthrough in COVID-19 vaccines.
The Philippine Stock Exchange index (PSEi) leaped 349.63 points, or 5.23 percent ,to close at 7,035.48 as share prices rose across the board with the Holding Firms and Property sectors leading the charge.
Volume jumped to 2.44 billion shares worth P13.08 billion as gainers beat losers 131 to 87 with 35 unchanged.
“Local shares soared after Germany-based BioNTech SE and Pfizer Inc. announced that their COVID-19 vaccine candidate achieved ‘success’ in the first interim analysis of a Phase 3 study,” said Regina Capital Development Corporation Managing Director Luis Limlingan.
He added that, “Pfizer and BioNTech got the rally rolling with word that its shot prevented more than 90 percent of infections in a study of tens of thousands of volunteers. With effectiveness for the first vaccines previously expected to be in the range of 60 percent to 70 percent, a rate of more than 90 percent ‘is just extraordinary,’ according to Anthony Fauci.”
Philstocks Financial Research Analyst Claire Alviar noted that, “The local bourse breached the 7,000 level, gaining 5.23 percent -highest since March 26, 2020, and the third-highest one-day rally this year.”
“The rally of the index was further pushed by the surge of the heavyweights like SM (11.11 percent), ALI (8.79 percent), and SMPH (6.83 percent),” she added.
Alviar noted that “investors shrugged off the third quarter GDP data and were focused on the positive developments over the Covid-19 vaccine. We think that it is because investors are forward-looking, and hoping for economic recovery.”
She expects “positive sentiment may still spill over in the coming days but we also expect a pullback given the rally these past few trading days particularly if investors see that given the third quarter GDP data, the government’s forecast of -4.4 to -6.6 percent contraction for the year may not be achieved, and the contraction for the full year 2020 could be deeper.”
“The PSEi gapped up and ended as Asia’s best performer,” said AAA Equities Head of Research Chris Mangunadding that, “The main index breached the 7,000 level for the first time since February.” He warned though that “the move is ‘too far, too fast’ and we may see a pull back in the coming days as the market corrects itself.”