The Philippine Stock Exchange index (PSEi) was back at the 7000 level on Wednesday when it closed at 7,030.95, climbing 2.47 percent or 169.64 points. Analysts said there was heavy bargain hunting and Wall Street rally.

Here are three fast facts on the PSEi back to 7000 level.

 

1. The PSEi rally was driven by bargain hunting in the midst of thin volume.

Harry G. Liu, president of Summit Securities, Inc., said that the market has been selling very softly in the past few weeks that there was a lack of support to 6800 level. “So the market is under oversold condition where you can notice that the volume has been very thin,” Business World reported Liu, as saying.

2. The US economy appeared promising along with upbeat global economic data, which drove a rally on Wall Street on Tuesday.

 The upbeat factory surveys from China, the euro zone, and the United States, and the measure of global manufacturing confidence hit its highest since December 2013 drove the Walls Street to rally. The Dow closed up by 0.6 percent, the S&P 500 by 0.85 percent, and the Nasdaq 0.85 percent on Tuesday.

 “I think foreign funds have sold already last year so there's not much overhang anymore,” GMA News reported Miko A. Sayo, trader at AP Securities Inc., as saying. He added that the market started to get aggressive and it is starting to buy already.

Southeast Asian stock markets, except Indonesia, also rose on Wednesday, as it took a cue from the Wall Street rally.

3. The PSEi, however, may have a medium-term rise in the coming days.

“In the meantime, I only expect a medium-term rise and [for the market] to consolidate for a while,” Liu said. He added that the long-term performance could depend on how the medium-term could turn out to be a positive consolidation.

What do you think of the PSEi going back to 7000 level? Let us know in the comments section below.