THE LOCAL stock barometer rallied back to the 8,000 level on Monday as disappointing US growth data rekindled bets that the US Federal Reserve won’t raise interest rates too soon.
The main-share Philippine Stock Exchange index gained 106.7 points or 1.34 percent to close at 8,069.81, tracking mostly higher market in the region.
At the local bourse, all counters ended in green, led by the holding firms which went up by 1.48 percent followed by property counter which increased by 1.34 percent.
Total value turnover was posted at P7.315 billion with 120 advancers and 82 decliners. There was P735 million in net foreign buying for the day.
Manny Cruz, chief strategist at Asiasec Equities, said the PSEi’s increase was “inspired by the prognosis that the FED rate hike will be delayed” alongside a good influx of foreign buying, in turn driven by expectations of better Philippine second quarter gross domestic product growth to be released this August.
The PSEi’s increase was led by GT Capital which went up by 3.25 percent followed by SMIC, BPI, SMPH, PLDT and URC which all advanced by over 2 percent. Ayala Corp, BDO, MPIC and ALI all gained over 1 percent.
Outside PSEi, Security Bank (+1.37 percent), Vitarich (+7.91 percent), Cebu Air (+4.31 percent) and Cemex (+2.18 percent) gained in heavy volume.
Jollibee and Globe slid by 1.57 percent and 0.71 percent, respectively.
Non-PSEi stock DoubleDragon Properties slipped by 3.75 percent.
Local stock brokerage AB Capital Securities said that with the index again breaching the primary 8,000 resistance level, the new support level with secondary support would be at 7,950. Primary and secondary resistance levels were seen higher at 8,100 and 8,150, respectively.
On Friday, it was reported that second quarter gross domestic product (GDP) in the US had grown by 1.2 percent year-on-year, much lower than the consensus estimate of 2.5 percent.
In a research note issued on Monday, Citigroup said the unusually large miss in Friday’s US second quarter gross domestic product (GDP) report had also raised the risk that the support to risk sentiment from persistent data surprises may be short-lived.
“Although the US economic surprise index dropped in response to the second quarter GDP disappointment, that move was exaggerated, as inventories masked an otherwise healthier GDP outcome. Elsewhere in the major economies, our economic surprise indices continue to improve and are well into positive territory. This suggests that investors’ bleak expectations are not being validated by data, and keep the risk alive that monetary policy outcomes continue to disappoint the aggressive expectations of most market participants,” the research said.