PHL shares recover sharply at early trades

Philippine shares recovered sharply at early trades Wednesday after a five-session decline on technical rebound and overnight gains of the US market.

The main PSEi added 246.53 points or 4.26 percent to 6,035.59 as of 10:02 a.m.

"We're seeing a recovery in the market which is a relief rally after sharp losses in the past weeks," Brian Ramos, analyst at Angping & Associates Securities Inc., told GMA News Online.

"The Philippine market is tracking overnight gains of the US Market, which was pushed by strong consumer confidence index and better orders for durable goods," he added.

Overnight, the Dow Jones industrial average was up 80.75 points, or 0.55 percent, at 14,740.31, the Standard & Poor's 500 Index was up 11.28 points, or 0.72 percent, at 1,584.37 and the Nasdaq Composite Index was up 16.46 points, or 0.50 percent, at 3,337.22.

Reuters reported orders for durable goods rose more than expected in May and a gauge of planned business spending gained for a third straight month, while existing single-family home prices posted their biggest rise in seven years in April.

It also said the Conference Board's US consumer confidence index rose in June, to 81.4 from a downwardly revised 74.3 in the prior month.

A&A Securities Inc. analyst Zhainee Rose Go also attributed the recovery to month-end window dressing.

Window dressing is a strategy used by fund managers, wherein they sell poor performing stocks and buy high flying ones toward the end of the year to improve their portfolio.

Ramos said sellers may come in again but the market is likely to stay in the positive territory.

"Though the US market shows improvement with the data, worry on Federal Reserve's tapering of its bond-buying program is still there and China's credit squeeze will remain," he said.

Last week, Fed chairman Ben Bernanke announced the US central bank may trim its $85-billion a month stimulus later this year if the world's largest economy improves.

Reuters reported the People's Bank of China (PBOC) engineered a cash crunch as a warning to overextended banks. —KG, GMA News

Matches