RP stocks surge for 3rd day on bargain hunting

(Updated 12:45 p.m.) Philippine stocks rose sharply for the third straight day on Friday, due to follow through buying of bargain shares created by an "extremely oversold market", analysts said. The Philippine Stock Exchange closed higher by 89.99 points, or 2.86 percent at 3,237.41. "This technical rally is what we call a retracement. The market is extremely oversold right now. The pick up today is still bargain hunting and follow through buying," said Jose Vistan, research head of AB Capital Securities. Vistan also said the local bourse's recovery tracks gains by Wall Street, which rose more than 100 points after the release of positive United States economic data. The Hang Seng index was also up by more than 5 percent in early trade, as was the Nikkei index, which had gained 2.8 percent in the morning session. "It's hard to predict what will happen in the short to medium term. It looks bearish but our situation right now is exceptional because the recent rate cut is acting as a support. We're waiting for another rate cut so it's really just wait and see right now," Vistan said. The US Federal reserve reduced its key interest rates by 75 basis points earlier this week to prevent the US economy from sliding into recession. There is wide consensus that the Bangko Sentral ng Pilipinas will follow suit and slash its rates aggressively in its next two policy meetings. In local trade, gainers trumped losers, 79 to 30 while 61 shares were steady. Volume traded reached 2.07 billion valued at P4.05 billion. Trading was led by market heavyweight Philippine Long Distance Telephone Co. which jumped P180 or 4.87 percent to P2,800. Top power distributor Manila Electric Co., surged P5 or 6.76 percent to P79. Ayala Corp., the country's oldest and largest conglomerate, rose P7.50 or 1.65 to P462.50. Its lending unit Bank of the Philippine Islands gained P1 or 1.68 percent at P60.50. Megaworld Corp. was steady at P2.90. - GMANews.TV