PSE index rebounds as investors pick up bargains

LOCAL SHARES recovered on Tuesday as the selling pressure started subsiding and with most investors hoping companies can endure the reimposition of stricter quarantine measures.

The bellwether Philippine Stock Exchange index (PSEi) rose 59.58 points or 1.04% to close at 5,775.50 on Tuesday. The broader all shares index gained 28.51 points or 0.83% to end at 3,426.97.

“With the BSP (Bangko Sentral ng Pilipinas) chief alleviating the fears of the effects of stricter restrictions…, the market rebounded and moved up in line with most of the regional markets after heavy selling (on Monday),” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message.

Metro Manila and other urban areas are back under tighter quarantine rules for two weeks as the government accepted the request of healthcare workers for a “time out” to help stem the rise in coronavirus disease 2019 (COVID-19) cases in the country.

The COVID-19 tally reached 106,330 on Monday, with the bulk of new cases located in Metro Manila.

Most investors left the market early in the week on fears of the lockdown’s implications, but sentiment improved on Tuesday after BSP Governor Benjamin E. Diokno said the quarantine has limited impact on the economy.

Optimism can also be linked to the improvement in manufacturing output overseas, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

“Investors became bargain hunters in the PSEi following the huge sell-off (on Monday) as many embrace for big week for corporate earnings, boosted by positive manufacturing data out of the euro zone,” he said.

Manufacturing activity across the euro zone expanded for the first time since early 2019 last month as demand rebounded after more easing of the restrictions imposed to quell the spread of the new coronavirus, a survey showed on Monday, Reuters reported.

IHS Markit’s final Manufacturing Purchasing Managers’ Index bounced to 51.8 in July from June’s 47.4 — its first time above the 50 mark that separates growth from contraction since January 2019.

Back home, all sectoral indices ended Tuesday’s session with gains. Mining and oil accelerated 216.99 points or 4.03% to 5,600.90; industrials added 124.12 points or 1.68% to 7,473.94; services improved 19.83 points or 1.47% to 1,368.97; financials grew 13.24 points or 1.2% to 1,109.80; property improved 28.66 points or 1.03% to 2,792.67; and holding firms climbed 33.63 points or 0.56% to 5,972.10.

Some 1.59 issues valued at P5.74 billion switched hands on Tuesday, down from Monday’s 1.63 billion issues worth P6.59 billion.

Advancers bested decliners, 136 against 52, while 46 names ended unchanged.

Net outflows were trimmed to P837.17 million from P1.64 billion on Monday but foreign investors remained sellers for the sixth straight session. — Denise A. Valdez