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Thursday, July 05, 2001

July 5, 2001

Dispelled

After being caught in an entrancing 10-session decline, the market finally gained some headway, following the peso's rebound to an average of P52.954 to a dollar from yesterday's P53.025. While there has been no feedback yet if the BSP intervened in the peso market today, the central bank did announce that it did not change interest rates. The BSP in fact has been consistently saying that its most serious consideration right now as regards the overnight rates, is the inflation picture for the rest of the year. In effect, the BSP has been downplaying any the chance of an interest hike based on the weakening peso.

In any case, most investors, despite the rain, went bargain hunting with 43 issues recording gains, compared to only 27 that showed losses. Turnover remains lackluster - not even reaching that P500mn mark.

Most funds flowed into big blue chips like BPI, which gained P1.50 to P72.5. Fellow Ayala subsdiary, ALI was also buoyed by the positive sentiment and gained 5.88% on the day to close at P5.4. BPC, having a see-saw week, once again performed strongly, gaining 6.98% to P1.84. SMPH, which has been fairly steady for the week, posted a modest gain of P0.10 to close at P6.2.

RFM quietly gained another 5.81%, closed at its intra-day peak and earned the distinction of reaching its 10-month high. What makes it remarkable though is that the rest of the market has reached bargain level prices courtesy of the 10-day skid.

For tomorrow, we would like to see the index breach through the 1410 level to affirm its technical rebound. Should that happen, we see a positive reversal for the index. Resistance is at 1430.

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