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PHL stocks soar 3% on technical bounce


Philippine stocks soared more than 3 percent in a technical rebound Thursday following six successive days of heavy losses that drove the main index nearly 8 percent down from its historic high.
 
Bargain hunters scoured the market for good buys, but analysts cautioned there is no guarantee that the downtrend is over.
 
The PSE index jumped 152.79 points or 3.14 percent to 5,017.02.
 
More than 3.465 billion shares valued at P7.107 billion were traded.
 
Gainers led losers 137 to 32, with 21 issues unchanged.
 
“It’s more of the fact that the market has dropped so much that one can see some bargains at the said levels (4,750-4,850),” said Jonathan Ravelas, chief market strategist at BDO Unibank.
 
The market opened at 4,865 when bargain hunters came in.
 
Only because the market has been down so much that the rebound was inevitable, said Juanis Barredo, marketing vice president for Citiseconline. 
 
“Hopefully, the market can hold at the 5,130 on the PSEi. Now, I’m saying hopefully because there is still a lot of selling pressure, a lot of people waiting for a rally to sell,” he added.
 
While solid fundamentals remain intact to warrant some bargain hunting, Jovis Vistan, research director of AB Capital Securities Inc., said, “there is still pressure… We’re not yet scot-free in terms of this rebound and the jitters from Europe’s financial crisis aren’t over yet.”
 
According to Reuters, news on Wednesday that some Greek banks face emergency funding needs dealt a further blow to risk sentiment, already beaten down by worries about much slower economic growth in China, a fragile US jobs market and the huge trading loss at JPMorgan Chase & Co., widely perceived to be excellent at risk management.
 
"May is typically a bear month for markets as players often look to take advantage of the saying, 'sell in May and go away,' but all the negative factors compounded to give momentum to sell risk assets indiscriminately," the Reuters report added, quoting Bob Takai, general manager of Sumitomo Corp.'s energy division. 
 
For the Philippine market, “only a move above the 5,250 levels will call the bulls back to play,” said BDO Unibank’s Ravelas.
 
“Otherwise, further tests toward the 4,750 to 4,850 are still possible,” he added. —GMA News
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