PSEi jumps 1.19% on positive US sentiment

The Philippine Stock Exchange (PSE) started the week up 73.52 points, or 1.19 percent, to close at 6,268.78.

According to Rizal Commercial Banking Corp. Chief Economist Michael Ricafort and Regina Capital Development Corp. Managing Director Louis Limlingan, this was driven by positive market sentiment in the US, which closed sharply higher last Friday, helped by upbeat reports and strong economic data.

“PSEi corrected higher in line with overnight gains in US stock markets to one of the monthly highs on the back of generally better US economic data, retail sales, long-term inflation expectations and consumer sentiment data. University of Michigan 5-10 Annual inflation expectations as of July also fell to an annual low of 2.8 percent. Markets have also priced in the increased likelihood of another 75 basis point Fed hike on July 27, 2022,” Ricafort said.

A pullback in local fuel pump prices also helped support today’s market sentiment.

On US catalysts, Limlingan said economic data will focus on housing as National Home Builders Association data is released when markets open on Monday, housing starts on Tuesday, and existing home sales data on Wednesday. On Thursday, the Philadelphia Fed will release a review of the manufacturing sector. The Manufacturing and Services Purchasing Managers Index will be published on Friday.

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Asian stocks also ended the week in positive territory. Hong Kong’s Hang Seng rose 2.70% to 20,846.18 after Chinese media reported construction on some stalled real estate projects was resuming after buyers threatened to cut mortgage payments. The Shanghai Composite index added 1.6% to 3278.10 as the China Banking and Insurance Regulatory Commission ordered banks and insurance companies to guarantee the transfer of apartments contracted for construction.

In Seoul, Kospi jumped 1.9% to 2375.25, while the Australian S&P/ASX 500 added 1.2% to 6687.10.

Trading was slow, with a net worth turnover of 3.89 billion pesos, below the year-to-date average of 6.47 billion pesos.

Japhet Tantiangko, senior analyst at Philstocks Financial Inc., said investors were largely on the sidelines due to continued concerns about the Federal Reserve’s possible aggressive response to rising U.S. inflation and another possible rate hike by Bangko Sentral ng Pilipinas in time of their August meeting.

Real estate led the sectors, climbing 3.56 percent. Mining and oil were in the tail, falling 0.59 percent.

Falling securities outperformed gainers from 91 to 89, while 55 securities remained unchanged.