Local stocks up 1.6% on good news from US, Europe

MANILA, Philippines—Local stocks rallied on Wednesday as global risk appetite was boosted by favorable economic data from the US and a fresh liquidity-pumping measure by the European Central Bank.

The main-share Philippine Stock Exchange index surged by 77.22 points, or 1.6 percent, to finish at 4,897.65, gaining for the second straight session.

All counters traded higher, taking their cue from upbeat trading on Wall Street overnight.  The closely watched Dow Jones Industrial index breached 13,000 for the first time since 2008 on Tuesday on the back of a favorable US consumer confidence data.

Month-end window-dressing activities likewise contributed to buoyant demand for local equities, dealers said.

Turnover at the local bourse amounted to P6.2 billion.

There were 99 advancers against 53 decliners while 49 stocks were unchanged.

The index was led higher by EDC, PLDT, AGI, BDO, AC, Philex, ALI, Globe, AP, URC, DMCI, AEV, SMIC and FGEN.  Other notable gainers were Union Bank, Philodrill and Security Bank.

On the other hand, MPIC and BPI bucked the day’s upswing.

Philex gained by 2.8 percent to P22.20, leading the mining index higher, as the company reported a record-high net profit of P5.8 billion for 2011 on the back of higher ore production and buoyant metal prices.

The mining counter gained by 2.9 percent, outperforming all other sub-indices. The holding firm also outperformed the main index as it rose by 2.8 percent.

Frances Cheung, strategist at investment bank Credit Agricole CIB, said Asian equities and currencies have generally rallied ahead of the second long-term refinancing operations by the European Central Bank. She said this was expected to continue to help the liquidity situation in Europe.

“The better-than-expected industrial production reported earlier by Japan and (South) Korea also added to the already upbeat sentiment,” Cheung said.

The rise in the Dow Jones index by 23.61 points, or 0.18 percent, to close at 13,005.12 overnight also provided a favorable backdrop to the market. Wall Street cheered reports that US consumer confidence had risen to a one-year high in February. A softening of oil prices from recent highs also boosted risk appetite.