Local shares end higher as US Congress confirms Biden’s win

By Angelica Y. Yang

Philippine stocks closed higher on Friday as investor sentiment took cues from markets abroad after the US Congress affirmed the win of President-elect Joseph “Joe” R. Biden, Jr. The bellwether Philippine Stock Exchange index (PSEi) climbed 170.27 points or 2.39% to end at 7,289.88. The broader all-shares index also improved, by 82.78 points or 1.94% to 4,354.27.

“Philippine shares surged after Congress confirmed President-elect Joe Biden’s election win, offering the prospect of more financial aid for consumers and businesses coping with the coronavirus pandemic,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said on Viber.

Philstocks financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a text message that the local market rallied on Friday as it tracked Wall Street’s “record-high performance over night.”

“This comes as the Democratic party takes control of the US congress while Joseph Biden’s election as President gets confirmed, raising prospects for further US fiscal stimulus,” he said. AAA Securities Research Head Christopher John Mangun said that the benchmark index ended the day with substantial gains led by blue chip banks.

“The general sentiment improved as investors took cues from markets abroad. US indexes continue to hit new all-time highs, showing investor confidence despite the recent political upheaval. Even China’s main index hit its highest level since 2008,” Mr. Mangun told BusinessWorld in an email interview.

He said the market’s performance on Friday allowed the PSEi to end the first week of the year with gains, despite the “heavy selldown” at the start of the week.

“This is the highest level that the main index has ended at since February of last year. Overall, investors remain confident with the current conditions and are willing to stay in the market for the longer term,” Mr. Mangun said.

US stocks in the Dow Jones Industrial Average, S & P 500, Nasdaq composite, New York Stock Exchange composite and S&P/TSX composite all rose on Friday.

Majority of Asian stocks, except for the CSI 300 index, also logged positive gains for the day. Back home, the majority of the sectoral indices ended Friday’s session with gains. Holding firms grew 152.69 points or 2.10% to 7,422.45; industrials edged up 129.85 points or 1.37% to 9,592; property improved 99.97 points or 2.71% to 3,785.02; financials climbed 47.90 points or 3.33% to 1,487.37; and services inched up 24.07 points or 1.59% to 1,540.28.

Mining and oil, however, decreased 63.32 points or 0.63% to close at 9,989.59.

Advancers led decliners, 141 vs. 74, with 48 left unchanged.

Value turnover stood at P11.06 billion with 25.13 billion issues switching hands, lower than the previous session’s P8.73 billion with 46.43 billion issues.

Net foreign buying reached P223.78 million from the net P680.38 million that left the market on Thursday.

For Trading Edge Consultancy’s Chief Investment Strategist Ron Acoba, bargain-hunting activities made stocks rally.

“Bargain hunting activities after the PSEi pulled back from its 10-month high of 7,304 to an interim low of 6,928 has led the index to rally. Regionally, the PSEi has actually just tracked its peers following a new record setting in the US equities markets as investors hope for further fiscal stimulus,” Mr. Acoba told BusinessWorld in an e-mail.

He said that he expects the PSEi index to consolidate below its key resistance at the 7,300- 7500 zone.

“Nonetheless, its earlier swing from a midrun base is ultimately setting it up to revisit its 2019 levels perhaps in the second half of the year,” he said.

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