Main index surges to 7,000 level on vaccine hopes

By Denise A. Valdez, Senior Reporter

THE BELLWETHER Philippine Stock Exchange index (PSEi) stepped into the 7,000 level on Tuesday, reaching its highest level since February, as positive development on a possible coronavirus disease 2019 (COVID-19) vaccine improved investor sentiment across the globe.

The main index closed at 7,035.48 on Tuesday, leaping by 349.63 points or 5.22% from the previous session. The broader all shares index surged by 135.35 points or 3.41% to 4,096.47.

Tuesday’s jump is the highest the PSEi recorded since March 26, when it posted a 373.82-point or 7.44% increase. Yesterday’s close is also PSEi’s best since Feb. 24, when it finished at 7,187.44.

The index sustained its uptrend all throughout the trading session. It opened at 6,792.58, which was already its low for the day, while its closing level was its intraday high.

“Local shares soared after Germany-based BioNTech SE and Pfizer Inc. announced that their COVID-19 vaccine candidate achieved ‘success’ in the first interim analysis of a Phase 3 study,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a mobile message.

“Positive sentiment spreads all over the equity markets… The rally of the index was further pushed by the surge of the heavyweights like SM Investments Corp. (11.11%), Ayala Land, Inc. (8.79%), and SM Prime Holdings, Inc. (6.83%),” Philstocks Financial, Inc. Research Associate Claire T. Alviar said in a text message.

“[P]ositive sentiment may still spillover in the coming days, but we also expect a pullback given the rally,” she added.

Tuesday’s trading coincided with the release of third quarter gross domestic product (GDP) data, which showed an 11.5% contraction, keeping the economy in recession.

The third-quarter performance brought the year-to-date average to a contraction of 10%. The government expects the economy to shrink by 4.5%-6.6% this year.

“[G]iven the market’s performance, we think that investors shrugged off the third-quarter GDP data and were focused on the positive developments over the COVID-19 vaccine,” Ms. Alviar said. “We think that it is because investors are forward-looking, and hoping for economic recovery.”

All sectoral indices closed higher on Tuesday: holding firms by 492.88 points or 7.08% to 7,446.23; property by 224.63 points or 6.94% to 3,457.04; financials by 43.03 points or 3.35% to 1,326.14; services by 26.41 points or 1.74% to 1,544.25; industrials by 57 points or 0.63% to 9,085.59; and mining and oil by 21.48 points or 0.26% to 8,175.19.

Value turnover stood at P13.08 billion with 2.44 billion issues switching hands, up from the previous session’s P8.02 billion with 1.71 billion issues. Advancers beat decliners, 131 against 87. Some 35 names ended unchanged.

Foreign investors posted net inflows of P2.28 billion on Tuesday against net outflows of P394.7 million in the previous session.