Shares rally to 6,900 level on strong earnings

The main index climbed to the 6,900 level anew on Thursday to end February on a strong note as sentiment was lifted by strong corporate earnings and as investors awaited the release of key US data.

The bellwether Philippine Stock Exchange index (PSEi) rose by 0.99% or 68.19 points to close at 6,944.71 on Thursday, while the broader all shares index went up by 0.48% or 17.40 points to end at 3,609.06.

“This Thursday, the local market rose by 68.19 points (0.99%) to 6,944.71. This is as investors continue to appreciate the fourth quarter and full-year 2023 earnings reports, as many have posted better results compared to the preceding year,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

The PSEi ended higher ahead of the release of the January US personal consumption expenditures (PCE) price index report overnight, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“This is the preferred inflation metric by the Federal Reserve, [and is] a source of new leads for the market, especially in terms of future Fed rate hike expectations,” Mr. Ricafort said.

“Philippine shares continued to outperform to close the month of February, buoyed by the latest MSCI rebalancing, while other investors weighed the latest earnings results and looked ahead to the Fed’s favored inflation gauge,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message.

Forecasts are for a 0.4% gain in the PCE price index, Reuters reported.

Markets have largely priced out a rate cut at both the Fed’s March and May meeting, CME’s FedWatch Tool showed. The chance of a cut in June sits around 51%.

At home, the majority of sectoral indices closed higher on Thursday. Financials rose 2.13% or 42.82 points to 2,048.47; holding firms went up by 1.61% or 103.96 points to 6,551.37; industrials increased by 0.98% or 90.78 points to 9,341.19; and services inched up by 0.15% or 2.63 points to 1,757.91.

Meanwhile, property declined by 1.42% or 40.95 points to 2,842.93, and mining and oil fell by 0.43% or 37.39 points to 8,510.83.

“Among the index members, Aboitiz Equity Ventures, Inc. was at the top, climbing 5.26% to P53.00. Converge ICT Solutions, Inc. lost the most, dropping 4.26% to P9.00,” Mr. Plopenio said.

Value turnover rose to PHP 11.96 billion on Thursday with 774.40 million issues changing hands from the PHP 4.73 billion with 379.4 million shares traded the prior day.

Decliners outnumbered advancers, 107 versus 81, while 41 names closed unchanged.

Net foreign buying went up to PHP 436.39 million on Thursday from the PHP 27.86 million on Wednesday. — R.M.D. Ochave with Reuters