Stocks surge past 2,900-point level for 1st time in 18 months

MANILA, Philippines - Local share prices rose 2.86 percent yesterday, sending the benchmark composite index past the 2,900 level for the first time in almost 18 months.

The Philippine Stock Exchange (PSE) composite index hit 2,967.06 points after rising 82.6 points, mainly driven by the Philippine Long Distance Telephone Co.’s huge gains which contributed 28.5 points to the index. 

The last time the main composite index breached the 2,900 – resistance level was on April 8, 2008 when it reached 2,981.12 points.

There were 87 gainers against 20 losers and 47 that were unchanged.

Volume amounted to 1.84 billion shares worth P5.32 billion.

The market advance was encouraged by an improving global economy, optimism that corporate earnings reports will beat expectations and the Dow Jones’ strong performance, boosted by Australia’s move to raise its key rates which was seen as a positive sign.

“After a long period of consolidation, the local index found a way through and punctured its 2,900 resistance Wednesday. For more than two months, the PSEi stayed within a narrow range and lacked strong leads to drive a rally,” AB Capital Securities said.

Benefiting from the market’s upward momentum are First Gen, Metro Pacific Investments Corp., Manila Electric Co., Ayala Land and Robinsons Land Inc.

ALI and RLC, which are bidding for the Food Terminal Inc. property in Taguig City, gained 2.08 percent and 6.1 percent, respectively.

Top-traded Metro Pacific Investments Corp. was up 7.57 percent to P3.55 while Philweb Corp. rose 20 percent to P15. Philex Mining Corp. gained 4.60 percent to P9.10.

AB Capital Securities has pegged the market’s new resistance at 3,100.

“Based on the growing investor activity, it seems that sentiment willbegin to turn positive this time. Made even better by the move of Australia’s central bank, we can hope for the better and perhaps see other economies support a recovery soon. Though data from both local and foreign countries do not yet show a strong economic comeback, we are sure that the economies are slowly making its way out of the downturn,” AB Capital Securities said.

Meanwhile, Crude oil prices rose on Tuesday as traders took their cue from the weak US currency, hit by a report that Gulf states considered dropping the dollar for oil transactions.

A struggling greenback tends to boost crude because the dollar-denominated commodity becomes cheaper for foreign buyers holding stronger currencies.

New York’s main contract, light sweet crude for November delivery gained 47 cents to $70.88 a barrel.

London’s Brent North Sea crude for November delivery rose 52 cents to $68.56 a barrel.

“Primarily the weakening of the US dollar prompted some capital inflows back into the crude,” said Jim Ritterbusch of Ritterbusch Oil Associates.

The analysts said the level of $70 “acts like a magnet, which keeps pulling the market back in whenever it gets down towards 65 or up towards 75,” he said.

Pressure on the dollar came after a report in The Independent daily in London said that Arab states had launched moves with China, Russia, Japan and France to stop using the dollar for oil trades.