Stocks rise on bargain hunting; peso up at 49-level - TrueID

Stocks rise on bargain hunting; peso up at 49-level

Philippine News AgencyAugust 31, 2021

MANILA – The Philippine Stock Exchange index (PSEi) ended Tuesday up due in part to window dressing while the peso followed and even improved to the 49-level against the greenback.

The main equities index rose by 1.01 percent, or 68.82 points, to 6,855.44 points.

All Shares jumped by 0.51 percent, or 21.47 points, to 4,225.58 points.

Most of the sectoral indexes also gained during the day and these are the Industrial, 2.05 percent; Holding Firms, 1.70 percent; Mining and Oil, 1.09 percent; Services, 0.92 percent; and Property, 0.03 percent.

Only the Financials index shed during the day after it fell 0.67 percent.

Volume reached 2.92 billion shares amounting to PHP14.85 billion.

Losers led gainers at 120 to 65, while 55 shares were unchanged.

“Philippine shares climbed on the combination of window dressing and the latest MSCI (Morgan Stanley Capital International) rebalancing to bargain hunt at closing,” said Luis Limlingan, Regina Capital Development Corporation head of sales.

Limlingan also cited the boost from risk-on sentiments due to the rise in equities index overseas, led by the technology stocks.

He forecast a range-bound movement for equities gauges this week pending the release of US’ jobs report for August on Friday.

“Consensus estimates (show that around) 750,000 jobs were created in August, and the unemployment rate fell to 5.2 percent,” he added.

On the local front, Limlingan said investors are awaiting the release of the Markit PH purchasing managers index (PMI) manufacturing report on Wednesday.

“In addition, sentiment got a boost as overseas equities edged higher on Monday led by tech stocks,” he said.

Meanwhile, the peso also gained against the US dollar after finishing the day at 49.76 from 50.08 Friday last week.

There was no trading on Monday due to the National Heroes’ Day holiday.

The local currency opened the day at 48.83 and traded between 49.87 and 49.65.

This brought the day’s average to 49.762.

Volume amounted to USD848.73 million, lower than the previous session’s USD922.6 million.

In a reply to e-mailed questions from PNA, Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort attributed the local currency’s second consecutive day of appreciation to “less hawkish Fed (Federal Reserve) statements during the Jackson Hole symposium, with no timing mentioned on any tapering schedule despite being appropriate in 2021 and more dovish statements in terms of not in a hurry on Fed rate hikes.”

“As a result of less hawkish Fed statements during the Jackson Hole Symposium, the US dollar declined to new two-week lows vs. major global currencies, thereby partly supporting the latest appreciation of the peso,” he said.

Ricafort also traced the peso’s strength to the government’s decision to extend the modified enhanced community quarantine in the National Capital Region until September 7, as well as the proposed granular lockdowns for the whole month of September.

This decision, he added, “could still slow down economic activities including imports.”

Slower growth in imports is a plus for the peso since it will mean lower demand for the US dollar.

He forecast the peso to stay between 49.65 to 49.85 levels on Wednesday, citing the “next important support is at the 49.59 immediate low posted on August 4, 2021.”(PNA)

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