The stock barometer soared to its best level in eight months on Monday, breaking out of the stubborn 7,000 barrier, as investors welcomed the downtrend in local COVID-19 cases that may allow further easing of lockdown protocols in the coming months.
The Philippine Stock Exchange index (PSEi) racked up 217.15 points, or 3.14 percent, to close at 7,124.01 as it also tracked mostly upbeat regional markets. This marked the PSEi’s highest finish since ending at 7,140.29 on Jan. 21.
This was also the highest single-day gain seen by the main index in four months.
Index newbie Converge recouped 7.14 percent after falling by 24 percent in the past two trading sessions as shares of private equity firm Warburg Pincus were released from the 365-day lock-up period. It was the day’s most actively traded company.
‘Fantastic recovery’
“Market was itching for a recovery today as several issues are technically oversold. Converge made a fantastic recovery, helping push the index past the 7,100 level. Investors seems to be flocking back to the PSEi in anticipation of further easing of restrictions,” said Astro del Castillo, managing director at local fund management firm First Grade Finance.
“Sentiments have turned bullish as pandemic concerns have been abating,” said Jose Vistan, head of research at AB Capital Securities.
Vistan noted the average number of new COVID-19 cases has declined by almost 30 percent and was now at a two-month low. He also pointed out local vaccine rollout has picked up speed, with 23 million Filipinos now fully vaccinated, and another 26 million awaiting their second jab.
“The PSEi is now at levels last seen in February and it is expected to test the 7,300 level in the coming days,” Vistan said.
“There is a strong probability that we can breach the 7,300 resistance level this year. We saw above average volume accompany this latest run to 7,000. A close scrutiny of the chart shows a double-bottom pattern, which shows a potential target of 7,860 for the PSEi,” Vistan said.
Del Castillo said, however, the market “may take it easy as red flags remain in the horizon.”
All counters ended higher on Monday, led by the property and financial counters, which surged by 5.48 percent and 4.5 percent, respectively. (©Philippine Daily Inquirer 2021)
