Stock prices end higher on European central bank’s stimulus move

The local stock barometer stayed above the 7,000 mark on Friday as investors welcomed the European Central Bank’s dovish signal despite tapering its current pace of monthly bond-buying program.

The Philippine Stock Exchange index (PSEi) gained 20.78 points or 0.3 percent to close at 7,043.16.

Elsewhere in the region, stock markets were mostly higher as the ECB signaled its willingness to add monetary stimulus if needed. This was even after the ECB agreed to extend its bond-buying program but at a reduced pace of 60 billion euros from 80 billion euros.

Citigroup said in a research note that the ECB’s decision to extend asset purchases to December 2017—but critically in a smaller size from April of 60 billion a month—was in line with its expectations.

“Note that this ‘tapering’ was put into a dovish context, however, as the ECB said to be ready to increase the size or duration of the program if needed, and also due to the removal of the deposit rated floor and the reduction in the average maturity,” Citi said.

At the local market, the day’s gains were led by the financial, holding firm and services counters while the industrial, mining/oil and property counters slipped.

Value turnover for the day amounted to P7.16 billion. There were 102 advancers versus 69 decliners while 44 stocks were unchanged.

The PSEi was led higher by banking stocks Security Bank (+3.82 percent) and Metrobank (+2.69 percent). Ayala Land, Ayala Corp., GT Capital and Metro Pacific Investments all gained more than 1 percent.

On the other hand, URC and SM Prime fell by over 1 percent while BDO, BPI, Globe and JG Summit also slipped.

For the week, the PSEi racked up 156.42 points or 2.23 percent from last week’s closing of 6,886.74.

Since the start of the year, the PSEi has now gained a modest 3.06 percent amid volatile global markets.