Index hits new peak, breaches 8,400
MANILA, Philippines — The stock market reached a new milestone yesterday, closing for the first time above the 8,400 mark.
With robust trading volume during yesterday’s session, traders said it may be time to pop the champagne cork with the market’s winning streak fairly consistent over the past three weeks.
The benchmark Philippine Stock Exchange index (PSEi) scaled a new record high of 8,402.81, 44.34 points higher than the previous level of 8,358.47, while the broader All Shares index gained 20.40 points, or 0.41 percent, to settle at 4,929.28.
This marks the first time the market closed above the 8,400 mark and is the eighth all-time high in the past several weeks.
Astro del Castillo, managing director at First Grade Finance Inc., said the bulls are winning over the bears. He said this could also be attributed to the global stock market euphoria.
“Trading yesterday was fantastic. The doomsayers were defeated after the index broke the 8,400 level. The bulls can be seen racing everywhere in the global markets. PSEi is also caught in the wave of optimism in the stock market all over the world,” Del Castillo said.
Del Castillo said Wall Street is also enjoying record highs. “A few favorable local news also gave more strength to the market,” he said.
He said traders can expect the momentum to continue in the coming days with a possibility of some correction or profit taking.
Luis Limlingan of Regina Capital said the release of the Federal Reserve meetings added to the optimism.
“Philippine markets resumed the upward trajectory as the minutes from the FOMC meeting confirmed what was on many analysts’ mind. The minutes from the September FOMC meeting discussed near-term effects from Hurricanes Harvey, Irma, and Maria but suggested broadly unchanged views on the underlying pace of growth and inflation,” he said.
Meanwhile, Asian stocks reached a 10-year high on Thursday, riding the bull run in global equity markets, while the dollar sagged after the Federal Reserve showed a more guarded view towards inflation.
MSCI’s broadest index of Asia-Pacific shares outside Japan was up 0.55 percent and at its highest since December 2007.
Japan’s Nikkei was up 0.4 percent after brushing 20,994.40, its highest since November 1996. South Korea’s KOSPI added 0.55 percent to mark a fresh record peak and Hong Kong’s Hang Seng scaled a decade-high.
Asia took cues from Wall Street, where major indexes rose to yet another set of record closing highs overnight following a report that a market-friendly candidate was being pushed as successor to Janet Yellen at the helm of the Fed.
Broader investor risk sentiment has improved this week after Catalonia dialed back plans to break away from Spain, with MSCI’s 47-country world stocks index reaching a record high.
Global equities now appear to be taking geopolitical developments such as the secessionist push in Spain and tensions on the Korean peninsula in their stride, to reach those record tops.
“Fundamentally, the global economy is in decent shape. Corporate sentiment is also sound as evidenced by strong data like the Chinese PMI, U.S. ISM and Japanese tankan. All these factors are leading to the rise in global stocks,” said Masahiro Ichikawa, senior strategist at Sumitomo Mitsui Asset Management in Tokyo.
“Financial markets will remain wary of geopolitical headlines. But barring actual military conflicts, negative responses by equities are expected to be short-lived.”
Fed policymakers had a prolonged debate about the prospects of a pickup in inflation and the path of future interest rate rises if it did not, the minutes showed.
While this did little to cool expectations for the Fed to raise interest rates in December, it did make the central bank appear slightly less hawkish than it seemed right after the September policy meeting when it signaled the year-end monetary tightening. – With Reuters