Today’s Stock Buzz- August 14, 2009
Federal Reserve announcement fuels rally
SHARE PRICES closed 0.97% higher yesterday as investors took their cue from overseas markets and an upbeat assessment of the US economy by the Federal Reserve, dealers said.
The benchmark Philippine Stock Exchange index rose by 27.54 points to 2,856.06. The all shares index rose by 0.94%, or 17.02 points, to 1,811.94.
A total of 3.80 billion shares worth P3.12 billion were traded.
Advancers led decliners 71 to 32 while 51 issues closed unchanged.
“It was influenced in a way by markets abroad, specially after the [US Federal Reserve] statement on the economy,” Jose Vistan of AB Capital Securities told Dow Jones Newswires.
“But with the Fed meeting over and most corporate earnings out, there is little in terms of catalyst for the market in the coming days. Expect profit taking.”
The Fed on Wednesday said it would keep its super-low interest rate on hold for a while but gradually end its program of Treasury bond purchases, adding the world’s biggest economy was stabilizing.
Wall Street stocks rallied. The Dow Jones industrial average gained 1.30% or 120.16 points to 9,361.61.
The Standard & Poor’s 500 index climbed by 1.15% or 11.46 points to 1,005.81, while the Nasdaq composite index gained 1.47% or 28.99 points to 1,998.72.
Emmanuel P. Soller of Equitiworld Securities, Inc. however pointed out that the US market serves only as a guide for the local market, even if its rallies usually prompt the same locally.
“The US market’s drops are used by investors to take their profits out. But overall, the local market remains [upbeat],” he said.
Selling pressure builds up, he pointed out, whenever the market nears the 3,000 mark because investors want to book their profits and not because they feel the future looks bleak.
“Investors play safe but this selling pressure will just be temporary unless there is negative news significant enough to make investors pessimistic of the market again,” Mr. Soller said.
Only one of the six subindices tumbled.
The service sector rose by 2.41% or 34.30 points to 1,456.80, while holding firms climbed by 2.16% or 32.44 points to 1,533.84.
The mining and oil sector gained 0.41% or 35.83 points to 8,582.25, while financial stocks advanced by 0.32% or 1.98 points to 606.66.
Property shares added 0.26% or 2.57 points to 977.87.
Industrial companies, however, tumbled by 0.43% or 18.71 points to 4,298.28.
Most blue chips closed higher.
Andrew Tan-led Megaworld Corp. added 2.98% or four centavos to P1.38, while index heavyweight Philippine Long Distance Co. climbed by 2.01% or P50 to P2,530.
Sy-led Banco de Oro Unibank, Inc. gained 1.47% or 50 centavos to P34.50.
Ayala Land, Inc. did not move at P9.40, as well as sister firm Bank of the Philippine Islands, which stayed at P46 apiece.
Manila Electric Co. fell by 2.4% or P6 to P244, while the Metropolitan Bank & Trust Co. tumbled by 1,.29% or 50 centavos to P38.
Maria Arlysa E. Narciso of AB Capital Securities, Inc. disagreed with AB Capital Securities’ Mr. Vistan, saying developments in the foreign markets as well as local earnings reports would continue to be major drivers for the local market.
“Earnings became the highlight of the week and reflected second-quarter impact of the slowdown on economic and business activity. Keep an eye on food-related companies as this could perform well in the coming months,” she said.
Entry Credit: http://www.bworldonline.com