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Philippine stocks rose to 7,000 territory on Tuesday as investors applauded the news about the development of the vaccine for the 2019 coronavirus disease (Covid-19).
The benchmark index of the Philippine Stock Exchange (PSEi) jumped 5.23 percent or 349.63 points to its intraday high of 7,035.48, while the broader All Shares rose 3.42 percent. or 135.35 points to finish at 4,096.47.
The last time the market broke this level was on February 24, when it closed at 7,187.44.
Philstocks Financial Inc. research associate Claire Alviar said the market’s gain of more than 5 percent is the highest since March 26 and its third-highest one-day rally of the year.
She attributed the jump in the local stock market to positive sentiment from the development of the Covid-19 vaccine, following the rally in US markets overnight.
The Dow Jones and the S&P 500 each gained 2.95 percent and 1.17 percent, while the Nasdaq fell 1.53 percent.
“The positive sentiment swept across the stock markets as Pfizer and BioNTech said that their Covid-19 vaccine was more than 90 percent effective in preventing Covid-19 among those without prior infection,” Alviar explained.
Alviar added that the rally in heavyweights such as SM Investments Corp. (SM), Ayala Land Inc. (ALI) and SM Prime Holdings Inc. (SMPH) further boosted the leading index.
SM, ALI, and SMPH all took a spot among the top winners, rising 11.11 percent, 8.79 percent, and 6.83 percent, respectively.
Alviar said investors ignored recently released third quarter gross domestic product (GDP) data and instead focused on positive developments from the Covid-19 vaccine.
The Philippine Statistics Authority reported Tuesday that the country’s GDP contracted 11.5 percent in the third quarter, an improvement over the 16.9 percent drop it saw in the second quarter.
“The positive sentiment can still extend in the next few days, but we also expect a setback given the rebound of these last trading days. In particular, if investors see that given the third quarter (third quarter) GDP data, the government’s forecast of a -4.4 to -6.6 percent contraction for the year may not be achieved, so the contraction for the entire year 2020 could be deeper ”, continued Alviar. .
AAA Equities head of research Christopher Mangun also attributed the market’s performance to news about Pfizer’s Covid-19 vaccine.
Like Alviar, he noted that investors ignored third-quarter GDP “worse than expected” as “most look to the future.”
“The only concern is that the recent move is ‘too far, too fast’ and we may see a pullback in the coming days as the market corrects,” Mangun said.
All local sectors emerged victorious with holding companies leading the indices with 7.09 percent.
Total turnover volume was 2.44 billion shares valued at P13.08 billion.
The winners outnumbered the losers, 131 to 87, while 35 values were unchanged.
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