PSEi up 5.23%, breaks 7,000 on COVID-19 vaccine breakthrough

The local stock barometer soared to the 7,000 level mark on Tuesday, further probing prelockdown levels, as American drug-maker Pfizer’s announcement of the COVID-19 vaccine breakthrough turned global markets euphoric.

The main-share Philippine Stock Exchange index (PSEi) rallied by 349.63 points or 5.23 percent to close on Tuesday at an eight-month high of 7,035.48 as foreign investors returned to the market.

This marked the PSEi’s best finish since Feb. 24 this year as investors ignored the disappointing third quarter Philippine gross domestic product (GDP) report and focused on Pfizer’s announcement that its COVID-19 vaccine is 90-percent effective based on third phase of trials. A prospective vaccine can signal an end to the pandemic that has depressed the global economy this year.

Asked whether he thought that the equities market was now back to the control of the bulls, BDO Unibank chief strategist Jonathan Ravelas said this seemed to be the case, adding that a sustained break above 7,000 would make it more convincing.

“This development pushed many investors to rebalance their portfolios to close out shots and add back stocks that had been adversely affected by pandemic lockdowns,” COL chief technical strategist Juan Barredo said. “These may have generated an overzealous drive in market volatility, which may have to normalize in the next few days.”

The strong performance in the US stock market overnight due to Pfizer’s announcement spilled over to the local market, allowing the PSEi to make one of the largest one-day rallies for the year, said AP Securities vice president Jaycob Yedra.

The day’s rally marked the strongest since March 26 when the PSEi surged by 7.44 percent. There was about P2.28 billion worth of net foreign buying.—DORIS DUMLAO-ABADILLA INQ