PH stock index surges 81.78 points
By Doris C. DumlaoPhilippine Daily Inquirer
MANILA, Philippines — Local stocks rallied sharply on Monday on the back of a technical rebound as well as fresh prospects of a bailout of Spanish banks and a global trend in monetary easing.
The main-share Philippine Stock Exchange index surged by 81.78 points or 1.64 percent to close at 5,075.85
All counters traded in the green but the day’s out-performer was the interest rate-sensitive property counter, which surged by 2.85 percent.
Value turnover amounted to P10.66 billion including a block transaction of Manila Electric Co. worth about P5.4 billion as about 60 million shares were traded at P90 per share.
There were 103 advancers versus 43 decliners while 42 stocks were unchanged.
Trading was upbeat elsewhere in the region as the prospective bailout of ailing Spanish banks was seen to temper the contagion in the euro-zone.
Dealers have been expecting the main index to retest the 5,100 resistance this week.
Investment bank Credit Agricole CIB said in a research note on Monday that the better performance of risky assets in the last few days could be explained by three main factors.
“First, it can be interpreted as a technical rebound after the downward trend recorded in previous weeks. Then soft data, as surveys and sentiment measures have been generally a little better than expected,” the bank said.
“Finally, market participants are tempted to take a positive reading of the latest events on the monetary policy front,” it said, citing the official policy rate cuts in Australia and China.
The investment bank said based on some comments made by important members of the US Federal Open Market Committee, it seemed that the US Federal Reserve was not far from introducing an easing bias to its policy. At the same time, it said that the overall tone of the European Central Bank appeared heading towards additional easing in the near term.
Additionally, Credit Agricole CIB said the Irish vote in favor of the EU’s fiscal compact was sending a positive message regarding the outcome of the forthcoming general elections in Greece.
“The lesson here is that there is no inevitability within the euro zone today and that popular discontent turns into a political majority for populist parties. Nevertheless, beyond the signs of hope that we might want to perceive here or there, the situation, especially in Europe, remains very challenging and hardly justifies further risk appetite,” Credit Agricole CIB said Monday.
The market understands that the banking union and some form of Eurobonds will be discussed during the next EU summit (on 28-29 June) as a way to strengthen the economic union, the research said.
Originally posted at 05:41 pm | Monday, June 11, 2012
Follow Us
Recent Stories:
Short URL: http://business.inquirer.net/?p=64515
