The local stock barometer reversed early losses to end Tuesday with a modest gain as regional markets welcomed the agreement among oil producers to cut oil supply.
The main-share Philippine Stock Exchange index gained 12.02 points or 0.18 percent to close at 6,880.91 as investors welcomed an agreement among oil producers to jointly curb output to address global oversupply. Oil prices are now back to the $50 barrel per level.
“In 2017 we continue to project a $61 per barrel average for Brent crude oil and $59 for WTI. We see a high point of $70 by mid-year,” American investment bank BofA Merill Lynch said in a research note.
Merrill Lynch said the OPEC (Organization of Petroleum Exporting Countries) deal supports commodity prices in 2017 but also warned of some macro headwinds ahead.
“What could send oil sub $40 (per barrel)? A toxic mix of faster-than-expected US rate hikes, much stronger US dollar, and a trade war with China,” it added.
At the local stock market, domestic investors were the ones who supported the day’s recovery as foreign investors remained heavy sellers to the tune of P1.11 billion.
Overall, investors were still generally jittery ahead of the US Federal Reserve policy meeting this week (Dec. 13-14), which is expected to result in a fresh US interest rate hike.
At the local market, the day’s rebound was led by the financial counter which rose by 1.02 percent. The services, mining/oil and property counters also increased while the industrial and holding firm counters slipped.
Total value turnover amounted to P7.21 billion. There were nearly as many advancers (88) as there were decliners (87).
The PSEi was led higher by MPI which rose by 3.68 percent while SM Prime, GT Capital, BDO, BPI, Jollibee, JG Summit and Globe Telecom all advanced by over 1 percent.
PLDT, Megaworld and EDC also firmed up.
On the other hand, URC slumped by 3.07 percent while AC also fell by 2.27 percent. ALI and SMIC both slipped by over 1 percent while Metrobank,AEV and Semirara also increased.