PSEi up on lower cases, US move to cool oil prices

 PSEi up on lower cases, US move to cool oil prices

The main index closed higher on Wednesday on last-minute gains on recovery hopes amid declining cases and as the United States moved to cool rising oil prices by tapping its reserves.

The bellwether Philippine Stock Exchange index (PSEi) climbed 17.94 points or 0.24% to close at 7,419,10, on Tuesday, while the broader all shares index fell by 2.10 points or 0.05% to end 3,935.54.

“The economic reopening theme continues to improve market sentiment amid the daily COVID-19 cases remaining low for the past few days,” Darren Blaine T. Pangan, trader at Timson Securities Inc., said in a Viber message.

The Department of Health reported 890 new coronavirus cases on Wednesday, bringing active infections to 17,864.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message the PSEi rose on the US’ move to tap its oil reserves to help bring down fuel costs.

The administration of US President Joe Biden announced on Tuesday it will release millions of barrels of oil from strategic reserves in coordination with China, India, South Korea, Japan and Britain, to try to cool prices after OPEC+ producers repeatedly ignored calls for more crude, Reuters reported.

Under the plan, the United States will release 50 million barrels, the equivalent of about two and a half days of US demand. India, meanwhile, said it would release 5 million barrels, while Britain said it would allow the voluntary release of 1.5 million barrels of oil from privately held reserves.

Japan will release “a few hundred thousand kiloliters” of oil from its national reserve, but the timing of the sale has not been decided, industry minister Koichi Hagiuda told reporters on Wednesday.

Crude oil prices recently touched seven-year highs, and consumers are feeling the pain.

The price of oil rebounded on Tuesday, after falling for several days as rumors of the plans made their way into the market. Brent crude futures rose 3.3% on Tuesday to $82.31 a barrel.

Most sectoral indices declined on Wednesday except for property, which increased by 39.18 points or 1.16% to end at 3,401.09, and holding firms, which rose 27.07 points or 0.37% to 7,165.72.

Meanwhile, industrials fell 69.59 points or 0.64% to 10,693.60; financials dropped 4.29 points or 0.26% to 1,621.01; mining and oil lost 21.12 points or 0.22% to end at 9,529.74; and services decreased 3.44 points or 0.17% to 2,019.48.

Value turnover decreased to P8.62 billion with 1.47 billion issues switching hands on Wednesday from P9.28 billion with 1.06 billion shares traded on Tuesday.

Decliners beat advancers, 93 versus 88, while 53 names closed unchanged.

Net foreign buying decreased to P36.98 million on Wednesday from P775.75 million logged the previous trading day.

Timson Securities’ Mr. Pangan said the PSEi’s support remains at the 7,060 area while resistance is at the 7,454.50 level. — M.C. Lucenio with Reuters