Late blue chip rally saves the day for local stock index

Photo taken from pse.com.ph

MANILA, Philippines—Local stocks traded lower for most of the session on Friday but a late surge in the buying of blue chips allowed the main index to close strongly just a few notches below a key barrier at 5,200.

The main-share Philippine Stock Exchange index gained by 46.88 points or 0.91 percent to close at 5,196.19, defying muted trading across regional markets.

For the week, the main index gained by 52.84 points or 1 percent as the local stock market closed higher in three out of the four trading sessions. (The market was closed on National  Heroes’ Day last Monday).

The PSEi’s gains were led by BPI (+3.02 percent), PLDT (+2.16 percent), BDO (+1.41 percent), SM Prime (+1.45 percent), DMCI (+1.45 percent), URC (+1.08 percent), AEV (+2.11 percent) and EDC (+2.22 percent).

AGI, SMIC, ALI, ICTSI and AP also contributed to the day’s upswing. Among non-PSEi stocks, Puregold also gained in heavy trade.

On the other hand, the PSEi’s gains were tempered by the decline of Metrobank (-2.62 percent), Meralco (-0.96 percent), AC (-1.58 percent) and Megaworld (-2.68 percent). Among non-PSEi stocks, Security Bank (-3.01 percent) was a notable decliner.

Joseph Roxas, president of Eagle Equities Inc., said the heavy buying of blue chips at the close of Friday’s session could be due to the resumption of window-dressing. “It’s the last day of the month,” he said.

Roxas said the market was still at a “safe” level as 5,100 was holding as a key support.

Many dealers and traders were puzzled, however, by the late-session buying binge in this period within the so-called “ghost month” when many Asian investors shy away from the market because it’s deemed an unlucky period.

Earlier, stock markets  in the region were lower ahead of US Federal Reserve chairman Ben Bernanke’s much-awaited speech at the Kansas City Fed’s Jackson Hole Economic Policy Symposium. Investors are awaiting further clues on the Fed’s monetary policy.