Local Stocks Climb to 6,500 But Buying Conviction is Still Lacking

The gauge for local stocks climbed its way back to the 6,500 level on Wednesday, but there is an apparent lack of buying conviction evidenced by the thin trading volume coupled with the rising Covid cases in the country.

This marks the Philippine Stock Exchange index’s (PSEi) first rise after three trading sessions closing at 6523.21, suggesting the addition of 65.42 points or an increase of 1.01 %.

“The PSEi ended higher after bouncing off its immediate support level of 6,440 level in the previous trading session. There was minimal trading at the beginning of the session as the sentiment remains subdued due to the potential escalation of the health crisis,” said the head of research at AAA Equities Christopher Mangun.

He noted that stock prices remained flat with a slight negative bias throughout the trading session.

“The lack of selling pressure at current prices was a sign that there is still some optimism and investors are willing to hold on to current positions despite the lack of positive catalysts. This attracted buyers to come in and pick these shares after several days of losses,” explained Mangun.

“Last minute buying propelled the main index to end at its high for the day. We expect this sideways trend on low trading volumes to continue until there is a significant change, whether positive or negative, in the current pandemic situation,” he added further.

All stock counters ended in the green with financial and holding firm counters in the lead, which reported a rise of 1.81% and 1.2%, respectively. Less than 1% was added by the rest of the subindices.

There was a meager value turnover at ₱4.68 billion. Net selling of ₱710.73 million was reported after foreign investors continued to cut their local stock holdings.

55 stocks remained unchanged while there were 111 advancers, which outnumbered 81 decliners. BDO, SM Prime, and Jollibee all rose by over 2%, guiding the PSEi higher.

Meanwhile, SM Investments, Ayala Corp., Metrobank, PLDT, and JG Summit all rose by 1%. Globe Telecom experienced an increase of less than 1%.

AyalaLand Logistics became a notable gainer outside of the PSEi after it announced its entry into the cold storage chain business; it climbed by 8.22%. Basic Energy grew by 5.15%, while Converge and AC Energy both rose by over 1%. Dito reported a 0.94% rise.

Source: Inquirer