Selective buying of large-cap stocks lifts PSEi

The local stock barometer ended slightly higher yesterday on selective buying of large-cap stocks while regional investors closely monitored the first round of French elections.

The Philippine Stock Exchange index (PSEi) firmed up by 10.72 points or 0.14 percent to close at 7,588.88, reversing the slight decline in early trade.

“Philippine markets were in a wait-and-see mode as centrist Emmanuel Macron took a big step toward the French presidency by winning the first round of voting and qualifying for the May 7 runoff alongside far-right leader Marine le Pen. The outcome is a huge defeat for the two center-right and center-left groupings that have dominated French politics for 60 years and also reduces the prospect of an antiestablishment shock on the scale of Britain’s vote last June to quit the European Union and the election of Donald Trump as US president,” said Luis Gerardo Limlingan, managing director at Regina Capital Development.

In addition, Limlingan said there was a weekend overhang from US stocks closing lower in choppy trade on Friday ahead of the French elections.

“The outcome of the first round of French elections is consistent with the opinion polls. As expected, the safe haven assets have given up on gains over the last several sessions—Japanese yen, gold and US treasuries (UST)—and risk assets have breathed a sigh of relief,” Citigroup said in a research note.

“But the performance of assets is more nuanced. Uptick in UST yields is benign in the context of election outcome. Perhaps residual positioning of reflation trade and anxiety over potential US debt shutdown later this week is limiting the selloff in US rates. Comments from US government officials since last week set forth an ambitious agenda for this week—tax reform, health care reform back on the table and agreement on raising the debt ceiling—but proof of the pudding shall lie in what can be achieved. Until then, a rolling over US economic surprises index and cautious commodity price action may resist a push up in US yields.”

At the local market, the PSEi was led higher by the financial, industrial, holding firms and services counters while the mining/oil and property slipped.