Stocks up on bargain hunting after two-day drop

Philippine shares rebounded on Thursday as investors picked up cheap stocks following the market’s two-day decline and despite the US Federal Reserve’s hawkish tone.

The Philippine Stock Exchange index (PSEi) gained by 0.79% or 52.77 points to end at 6,659.99 on Thursday, while the broader all shares index rose by 0.37% or 13.34 points to finish at 3,537.29.

“This Thursday, the local market rose by 52.77 points (0.79%) to 6,659.99 as investors hunted for bargains after a two-day decline,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message. “However, ongoing economic headwinds such as the peso’s depreciation and the Fed’s hawkishness kept many on the sidelines.”

“Philippine shares bounced back as the minutes from the Fed’s May meeting confirmed the central bank’s concern to watch inflation,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan likewise said in a Viber message.

The peso closed at PHP 58.13 a dollar on Thursday, down by seven centavos from the previous day.

Meanwhile, US Federal Reserve officials at their last policy meeting said they still had faith that price pressures would ease at least slowly in coming months, but doubts emerged about whether the current level of interest rates was high enough to guarantee that outcome and “various” officials said they’d be willing to hike borrowing costs again if inflation surged, Reuters reported.

That meeting was held before data showed the pace of consumer price increases beginning to cool again in April, yet reflected what US central bank officials since then have said is increased uncertainty about the path of inflation and monetary policy.

“Investors are now awaiting weekly jobless claims and new home sales data for April,” Mr. Limlingan added.

The majority of sectoral indices ended higher on Thursday. Holding firms rose by 1.4% or 81.81 points to 5,922.75; property went up by 1.22% or 30.88 points to 2,562.74; industrials climbed by 0.94% or 86.41 points to 9,270.46; and financials increased by 0.24% or 4.95 points to 2,009.01.

Meanwhile, mining and oil declined by 1.28% or 122.95 points to 9,440.09, and services went down by 0.32% or 6.43 points to 1,997.81.

“Among the index members, Converge ICT Solutions, Inc. was at the top, rising 5.94% to PHP 10.70. JG Summit Holdings, Inc. lost the most, dropping 3.78% to PHP 31.80,” Mr. Plopenio said.

Value turnover rose to PHP 6.36 billion on Thursday with 791.21 million shares changing hands from the PHP 5.36 billion with 1.34 billion issues traded on Wednesday.

Decliners outnumbered advancers, 100 to 94, while 37 names closed unchanged.

Net foreign buying stood at PHP 248.74 million on Thursday versus the PHP 644.63 million in net selling seen on Wednesday. — R.M.D. Ochave with Reuters