PHILIPPINE SHARES rebounded on Tuesday as investors picked up cheap stocks after the market’s drop, although the mood remained cautious as the US Federal Reserve was set to begin its two-day meeting overnight.
The Philippine Stock Exchange index (PSEi) jumped by 1.5% or 91.31 points to close at 6,148.74, while the broader all shares index rose by 0.97% or 35.63 points to end at 3,706.20.
“After the market closed in the red yesterday (Monday), buyers took control of today’s session as bargain hunting persisted. However, firm catalysts are still needed to determine whether this marks the beginning of a true market recovery,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“The local market surged on the back of a technical rebound in battered banking names as investors take the opportunity to pick up blue-chip banks like BDO and BPI at a discount,” AP Securities, Inc. said in a market note. Shares of BDO Unibank, Inc. climbed by P5.40 or 3.96% to close at P141.80 each on Tuesday, while Bank of the Philippine Islands surged by P7.40 or 7.23% to end at P109.70 apiece.
Mr. Limlingan added that the local market tracked Wall Street’s rise overnight.
“Investor sentiment was lifted by expectations of an upcoming interest rate cut from the Fed, which slightly offset the concerns about slowing job growth,” he said.
The three major US stock indexes closed higher on Monday, with the S&P 500 and the Nasdaq notching intraday record-high closes, as investors await the US Federal Reserve’s crucial policy meeting later this week, Reuters reported.
The Federal Open Market Committee meeting on Sept. 16-17 looms large over sentiment this week, with market participants widely expecting a 25-basis-point reduction following recent economic data signaling labor market weakness.
Traders on Monday are pricing in a 96% chance of a 25-basis-point cut at this week’s meeting.
The Fed has kept its target rate at the 4.25%-4.5% range since December last year.
The majority of sectoral indices closed higher on Tuesday. Financials jumped by 3.69% or 74.18 points to 2,080.42; mining and oil climbed by 3.21% or 367.98 points to 11,804; services rose by 1.29% or 28.15 points to 2,206.69; holding firms increased by 0.84% or 42.29 points to 5,028.02; and industrials went up by 0.5% or 45.16 points to 9,029.01.
Meanwhile, property declined by 0.43% or 10.78 points to 2,462.58.
Value turnover increased to P6.56 billion on Tuesday with 3.69 billion shares traded from the P6.24 billion with 3.48 billion shares exchanged on Monday.
Market breadth was positive as advancers beat decliners, 101 to 93, while 59 names closed unchanged.
Net foreign selling thinned to P35.46 million on Tuesday from P473.25 million on Monday. — Alexandria Grace C. Magno with Reuters