Local markets bounce back on weak US economic reports

PSEi gained 0.92, or 68.17 points, to 7,517.37 points, which Landbank market economist Guian Angelo S. Dumalagan attributed to the US economy’s sluggishness as indicated by the US Producer Price Index (PPI) and the “dovish tone from the Beige Book.” (Shutterstock photo)

MANILA — Bargain hunting allowed the Philippine Stock Exchange index (PSEi) to cut short its eight-day losing streak Thursday, which also gave the peso a much needed boost.

PSEi gained 0.92, or 68.17 points, to 7,517.37 points, which Landbank market economist Guian Angelo S. Dumalagan attributed to the US economy’s sluggishness as indicated by the US Producer Price Index (PPI) and the “dovish tone from the Beige Book.”

US PPI for August 2018 is down by 0.1 percent, the first drop in around one-and-a-half years due to drop in the prices of food. On the other hand, an uptick was noted for the cost of energy products.

Similarly, the Federal Reserve’s Beige Book, which collates economic reports from its 12 districts, indicated “moderate pace” of growth for the world’s largest economy.

It, however, noted trade concerns and lack of workers that resulted to delay in implementation of projects.

Dumalagan said US equities also registered mixed results as investors wait for updates on the possibility of US-China trade talks in the coming days.

With sentiments posting varying results, the Philippines’ main stocks gauge improved along with the other counters.

The broader All Shares is up by 0.55 percent, or 25.15 points, to 4,602.31 points.

Mining and Oil led the sectors with an increase of 1.97 percent and was followed by the Property, 1.

21 percent; Industrial, 0.84 percent; Services, 0.81 percent; Holding Firms, 0.56 percent; and Financials, 0.48 percent.

Volume was thin at 738.47 million stocks amounting to Php6.

07 billion.

Losers led gainers at 123 to 72 while 45 shares were unchanged.

Meantime, the peso ended the day at 54.07 from a multi-year low of 54.13 Wednesday.

The factors that affected local equities “kept the USD lower,” Dumalagan said, which provided a breather for the peso.

For the day, the local unit opened at 53.99 from 53.9 a day ago.

It traded between 54.09 and 53.935, bringing the day’s average to 54.004.

Volume reached USD658.3 million, lower than the USD772.5 million a day ago.