Tracking Wall Street gains, PSEi flirts with 7,500 level

MANILA, Philippines — Local shares rallied on Wednesday, following gains in US equity markets as investors become less worried about the Federal Reserve's plans to tighten monetary policy, while more strong corporate results lifted optimism about the outlook.

The Philippine Stock Exchange index flirted with the 7,500-level to finish midweek trading up 1.32% to 7,458.99. The broader All-Shares index landed in positive territory as well, inching up 0.74%.

Most of the sub-indices closed in the green, with property shares leading the pack as it scooped up 3.02%.

For Michael Enriquez, chief investment officer at Sun Life Investment Management and Trust Corp, the local bourse took to heart the positive developments in US equity markets. After Wall Street inched up 0.7% by the end of Tuesday, European markets moved in concert.

"The PSEi followed the rally across Asian markets today driven by higher US markets overnight. Locally, the lowering of the Alert level in the National Capital Region prompted better investor sentiment towards a more stable reopening story," Enriquez said in a Viber message.

At home, the national government loosened quarantine restrictions in Metro Manila and nearby provinces starting February 1, as daily infections saw steady declines in the past two weeks.

Rastine Mercado, research head at Chinabank Securities, agreed with Enriquez that restrictions boosted investor sentiment. However, Mercado expected the local bourse to stay put at its current levels.

"Over the near term, we see the index taking a pause at the 7,500 resistance," Mercado said in a text message.

Regional equity markets saw gains as well on trading on Wednesday. Tokyo, Sydney, Wellington, and Jakarta were all up more than 1%, while Mumbai and Bangkok also chalked up advances.

The gains abroad were mostly carried by investor sentiment becoming less worried about the impending US Fed rate hike meant to cut asset purchases that supported the US economy. But commentators abroad have said the selling in global stocks may have gone too far and traders were buying bargains.

At home, foreign investors bought P980.43 million more shares than they bought in the stock market. A total of 1.52 billion local shares, valued at P7.84 billion, switched hands on Wednesday. — with a report from AFP