PSEi rebounds to 6,400

THE LOCAL stock barometer rebounded sharply on Monday, retesting the 6,400 level, as global markets extended rallies on bets of monetary stimulus from major central banks.

The main-share Philippine Stock Exchange index rose by 226.03 points or 3.64 percent to close at 6,434.08.
The index is still 20 percent off from the peak level in April 2015, thereby remaining in bear territory.

The day’s rally was led by the interest rate-sensitive property counter which rose by 5.47 percent while holding firms gained 4.27 percent.

The financial counter rose by 2.09 percent while the industrial counter rose by 1.35 percent. Even the mining/oil counter – heavily battered by the global slump in commodities – gained 1.17 percent.

Value turnover for the day amounted to P6.67 billion. There were 131 advancers which edged out 46 decliners while 35 stocks were unchanged.

ALI led the PSEi higher with its 7.52 percent gain while AGI rose by 6.06 percent. SM Prime and SMIC both surged by over 5 percent while Metrobank gained over 4 percent.

Investors also snapped up shares of PLDT and ICTSI, which both gained over 3 percent while Megaworld and RLC both added 2 percent.

Jollibee, MPI, DMCI, Globe and FGEN all rose by over 1 percent while URC, GTCAP and BPI also firmed up.

Outside of PSEi stocks, DNL (+3.47 percent) and RRHI (+0.52 percent) gained in heavy volume.

The recent declines had presented an opportunity for investors to take advantage of heavyset and oversold stocks and looking to sell into rallies, said COL head of technical research Juan Barredo.

“Provided 6,000 holds, we expect rallies from the index this week as oversold readings from two weeks ago has already started to lighten. However, these rallies are temporary due to highly bearish technicals – no significant reversal signals were spotted so recovery trend could only extend to 6,300, with a maximum of 6,585 (20-day moving average),” said Luis Gerardo Limlingan, managing director at Regina Capital Development.

“On the other hand, failure to hold support will cause further pullbacks to 5,900 – 5,400 (2013 support). As such, we reiterate our defensive strategy from last week by selling on rallies until technical readings show reversing signals,” he said.