The Philippine Stock Exchange index (PSEi) rebounded to 6600 level on Tuesday as it closed to 6,658.20 points, up by 1.44 percent or 94.53 points. Analysts said there was bargain hunting but still warned that the index could remain flat due to the absence of catalysts.
Here are three fast facts about the PSEi rebounding to 6600 level.
1. The PSEi had a “relief rally.” Some investors were still on vacation while others took advantage of some stocks that were down last week.
“We saw a relief rally today after reaching a new low last week. Although volume was very thin..,” Business World reported Lexter A. Azurin, research head at Unicapital Securities, Inc., as saying.
The PSEi closed in the red on Friday as the lack of catalysts caused the local index to dip at the 6500 level.
“The PSEi started the last week of the year with window dressing, without any leads from the US which was closed the previous night due to a holiday. GMA News reported Luis A. Limlingan, managing director at Regina Capital Development Corp., as saying.
Ralph Christian G. Bodollo, equity research analyst at RCBC Securities, Inc., said that the opportunistic buying caused the rally on the first day of trading after the Christmas holidays. He added that trading is expected to be thin for the rest of the week.
2. The PSEi rallied with the rest of the Asian stocks and a slight increase in Wall Street.
MSCI’s broadest index of Asia-Pacific shares outside Japan was marginally higher, with Australia, New Zealand, and Hong Kong closed. Japan’s Nikkei, however, closed with little change amid thin trade.
“Shares are overbought and due for a bit of profit-taking but moves toward a resolution of bank woes are helping in Europe, global economic data is mostly good and the period around Christmas/New Year is normally positive for shares," Reuters reported Shane Oliver, head of investment strategy at AMP Capital in Sydney, as saying.
3. Although hoping for a higher rally, analysts said that it could still be difficult for the local index to finish higher during this last week of trade for 2016.
The PSEi is still seen to end in the red as 2016 ends. “It is the time of the year when markets trade with hushed tones,” Jingyi Pan, market strategist at IG, said.
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