Local share prices surged yesterday on the back of positive developments here and abroad, pushing the Philippine Stock Exchange to close above the 6,800-level for the first time in history, notching its record high for the 23rd time this year.
The main index jumped 123.49 points to close at a new record 6,835.21 with all sectoral indices also in the green. The property and holding firms counters led the advance on expectations that interest rates will remain low as inflation remained manageable.
The local market’s strong showing came after the Dow Jones industrial average on Tuesday regained all the losses suffered during the Great Recession and reached a new high. The blue-chip index rose 125.95 points Tuesday and closed at 14,253.77, topping the previous record of 14,164.53 on Oct. 9, 2007, by 89.24 points. Other markets in Europe and Asia likewise rallied in reaction.
At the local bourse, gainers beat decliners almost two-to-one (117-61)while 38 issues remained unchanged.
Trading volume was heavy with 3.72 billion shares valued at P13.2 billion changed hands.
“The bulls handily took back the little ground it surrendered to the bears in the two sessions prior to yesterday, pushing the PSEI to its 23rd record close for the year-to-date,” said Accord Capital Equities Corporation analyst Justino Calaycay Jr.
He noted that, while he and many other analysts expected the main index to break past the 6,800-level, no one projected it to happen this soon.
“Inspiration came from a number of fronts: US equity prices rose to a new record, beating the previous set in 2007 as investors have opted to look beyond the ‘sequester’ that took effect at the start of the month after Congress failed to pass necessary legislation to avert automatic spending cuts to the promising numbers from the manufacturing, housing and jobs front,” said Calaycay.
Calaycay said “the market’s phenomenal run appears to go unabated. Optimism is so thick that nearly two-thirds of PSEI components are trading at or near all-time highs.”
“Not even the emergence of some causes for concern last week from Europe (Italian elections) and the US (sequester) could deter buyers from increasing equity exposures. Not to mention the long standing warnings of high valuations and extreme technical conditions,” he said.