Philippine stocks surge on upbeat US news

AFP PHOTO

MANILA, Philippines—Most local stocks surged for a fourth straight session on Wednesday as a string of favorable US economic news boosted global risk-taking.

The main-share Philippine Stock Exchange index gained by 65.55 points, or about 1.5 percent, to finish at 4,487.77.

This developed as Wall Street started its first day of trading in an upbeat mood on Tuesday, lifting the Dow Jones Industrial Average by 179.82 points, or 1.4 percent, to finish at a five-month high of 12,397.38. Investors took heart from reports that US factory output had risen in December at the fastest pace in six months. This was complemented by news that US construction spending jumped in November.

Also, January is usually a strong season for equities as investors take a fresh position after their yearend window-dressing activities. Most equity markets across the region likewise traded strongly on Wednesday.

“It’s a positive surprise. This is the January effect. It’s essentially the weight of money.  It’s a liquidity-driven type of rally,” said Erico Claudio, strategist at Pentacapital Investments.

In its daily report, AB Capital Securities said the US manufacturing index was one major indicator that provided a positive surprise. “This was after China also released a better-than-expected manufacturing data of its own. The US ISM was at 53.9, a gain from 52.7 in November and better than the consensus expectation of 53. Any number above 50 indicates expansion and anything under represents contraction. This clearly shows that the US manufacturing sector was still expanding moderately in December and at a somewhat faster rate than in November,” the brokerage said.

All counters were up but services benefited the most as its sub-index jumped by 2.2 percent led by PLDT. Value turnover improved to P5.83 billion from the previous day’s P4.87 billion.

There were 119 gainers overwhelming 49 decliners while 39 stocks were unchanged.

Shares of index heavyweight PLDT gained by 2.3 percent to a 52-week high of P2,640.

ALI, EDC, URC, SMC, AGI, AC, ICTSI, Metrobank, Meralco, AP, Globe, BPI and DMCI also aided the local stock barometer’s rise. Other stocks that gained in heavy volume were NiHao, Lepanto A (open only to local investors) and B (open to all) and Security Bank.

MPI bucked the day’s upswing.