The local equities market ended 2009 on a positive note with a 20-point gain and improved volume of trade.

The last trading day of 2009 capped what has been an outstanding recovery year for the market, says BPI Securities.

The composite index rose 63 percent, more than making up for the losses in 2008.

A recovering US economy and capital markets by the second quarter coupled with the local merger and acquisition served to provide the needed impetus for investors, says BPI.

“We are optimistic regarding the market's prospects for the new year. Continued corporate earnings growth will continue to move the market higher, albeit at a slower pace,” BPI added.

AB Capital Securities expects the market’s strong performance on Dec. 29, the last trading day would be carried over on the first trading sessions of 2010.

“Short-term stochastic oscillators are giving bullish signs, which are indicating a possible test of the 3,100 level early in 2010,” says AB Capital.

“The weekly charts also shows multiple supports levels. We are currently hovering above our medium term moving averages and the lower band of our major uptrend channel.”

“There seems to be no immediate negative catalyst that is expected to push the index below these important support levels,” says AB Capital.

Investors are also positioning on optimism that 2010 be a good year for equities market. “Stocks were short term oversold and the stochastic oscillators gave buy some buy signals also.”

The strong positive close in 2009 was also seen among other markets in the US, Europe and Asia. The Dow Jones Industrial Average closed its overnight sessions on a very strong note, reaching another fresh year high.

The local main composite index ended the year at 3,052.68 points, 63 percent up year-on-year. All major sub indices were in the green with the industrial and holdings sub indices having the biggest gains of 1.47% and 1.74% respectively.

AB Capital noted that among individual issues, Meralco (MER) led the market's gains as it surged 4.06% to close at P205.00.