The Local stock barometer firmed up for the fifth straight session Wednesday, clinging to the 7,500 level even as Chinese stocks tumbled anew.
The Philippine Stock Exchange index (PSEi) gained 20.28 points or 0.27 percent to close at 7,559.04.
Traders said a break above the resistance levels at 7,580 and 7,600 was needed to persuade the bulls to return to the local market, which has seen a lot of volatility since May due to jitters over the Greek debt crisis, the US Federal Reserve’s expected increase in interest rates and, most recently, the stock market turmoil in China.
Stock markets in Shanghai and Hong Kong returned to the doldrums Wednesday even after China reported a second-quarter gross domestic product growth of 7 percent, the same pace seen in the previous quarter and slightly better than market consensus.
Despite the short-term volatility in the local stock market, Maybank ATR Kim Eng Securities economist Luz Lorenzo said Wednesday that foreign funds would likely return to the local market as the
country’s good fundamentals were still intact.
“When you compare fundamentals in terms of fiscal space, current account surplus, liquidity and banking strength, there are not too many countries with the same characteristics,” Lorenzo said. “Because of these fundamentals, we will continue to attract foreign and domestic investors.” At the same time, she said the low-interest rate and benign inflation environment would bode well for direct investments, portfolio investments as well as capital spending of corporations.
At the local market, the upswing Wednesday was led by the mining/oil counter, which rose 1.25 percent while the financial, holding firm, services and property counters also contributed to the gain. Only the industrial counter ended lower. Doris Dumlao-Abadilla