ASIAN MARKETS CLIMB ON FIRST TRADING DAY OF 2011
MANILA, JANUARY 4, 2011 (MANILA TIMES) BY KRISTA ANGELA M. MONTEALEGRE REPORTER - LOCAL share prices inched up on the first trading day of the year, while the rest of Asia made a strong start on Monday, with Seoul hitting a record high. At the Philippine Stock Exchange, the composite index gained 14.07 points, or 0.33 percent to 4,215.21, while the broader all-shares index rose 38.12 points, or 1.27 percent to 3,044.54.
Gainers beat losers, 79 to 40, while 30 stocks were unchanged. A total of 5.21 billion stocks worth P3.77 billion were traded.
"Global markets returned to action on a positive light, reflecting investors' continued hope and trust that economic recoveries will swing wider and stronger this year," said Jun Calaycay of Accord Capital Equities Corp.
The advance was led by heavyweight Manila Electric Co., which rose 7.46 percent to P245 on reports that it was spending P45 billion for network upgrade.
"The markets will continue to balance between the optimists and those who wait for a retreat, based on technical indications to take positions," said Calaycay.
The main index gained as much as 30 points on upbeat investor sentiment before succumbing to profit takers to give up more than half of the day's advance.
Analysts expect the index to consolidate in the first two weeks as investors cash in on gains made over the December trades.
"Overall, we might see some profit taking, which has already started today. As people come back to the market, they'll see some prices have moved up so they'll be selling these stocks," said Joseph Roxas, president of Eagle Equities Inc.
Technical indicators, however, suggest that the main index remains bullish to start the year.
"We have a bullish reversal pattern waiting to break out to bring us to 4,500 and beyond, and the indicators are supportive of the price action," said Bonner Dytoc of Absolute Traders.
"Nevertheless with the long-term outlook still positive, buying selectively remains the overall trading norm," said Calaycay.
Roxas expects the main index to post a modest gain of 14 percent, ending the year at 4,800. The bellwether index closed at 4,201.14 in 2010.
Asian stocks rose on Monday as traders looked forward to a healthy year ahead, although several major markets were closed for holidays.
Seoul ended 0.93 percent, or 19.08 points, up at 2,070.08, its best ever finish as dealers welcomed data showing manufacturing activity hit a seven-month high.
Hong Kong rose 1.52 percent by the break and Singapore added 1.20 percent after figures showed the economy had grown at its strongest rate ever last year. Mumbai's Sensex was 0.35 percent up in noon trade.
Australia, Tokyo, Shanghai, Wellington and Bangkok were closed for public holidays.
Castor Pang, research director at Cinda International in Hong Kong, predicted a strong start to the year for the markets.
Dealers bought up stocks as sentiment was boosted by signs of an uptick in the United States, where unemployment looks to be subsiding as the world's biggest economy picks up.
The peso, on the other hand, moved sideways against the dollar during the first trading day of the year as traders look for new direction.
At the Philippine Dealing System, the peso gained 7 centavos to the dollar to close at 43.77 from 43.84 when it last traded on December 30.
Traders said the pair was only moving within the range as it seeks for new leads coming from a "very good year."
The peso dollar exchange rate opened at 43.75 and moved to a high of 43.83 to a low of 43.65.
Total trading volume reached $722.81 million.
The pair is expected to trade at a range of 43.50 to 44. WITH REPORTS FROM AFP AND LAILANY P. GOMEZ
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