PHILIPPINE share prices on Wednesday bounced back to settle slightly below its record level after the Dow Jones industrial average breached 13,000 for the first time since before the financial crisis in 2008.

At the Philippine Stock Exchange, the composite index added 33.35 points or 0.68 percent to 4,934.29, just a few points shy from its all-time high of 4,943.84 posted on Monday.

The broader all-shares index gained 29.10 points or 0.88 percent to 3,325.70. Advancers led decliners, 108 to 64, while 37 stocks were unchanged. A total of 19.50 billion shares worth P9.12 billion changed hands.

“Stocks rode on the previous session’s momentum, with confidence propped higher by the Dow’s breach of the 13,000-line overnight,” said Jun Calaycay of Accord Capital Equities Corp.

“Investor sentiment usually glides with Wall Street’s movement and the breach of 13,000 showed signs of continued momentum in equities markets,” said Freya Natividad, investment analyst at 2TradeAsia.com.

Overnight, the Dow climbed above 13,000 for the first time in almost four years, but it failed to hang onto the gains through the session’s end. It finished at 12,965.69, up 15.82 points or 0.1 percent, finally reacting to a Greek bailout deal after coming off a long weekend.

Although Europe continues to battle its sovereign debt crisis, the favorable fundamentals of the domestic economy will continue to encourage risk-taking among investors, analysts said.

“These conditions do not change on a daily basis, and the balancing of the importance of each, from the purview of individual perspectives, will keep the market swinging to and from optimism to pessimism,” Calaycay said, adding that swings toward the former will be longer.

“Sustaining the new-found optimism will get support as more firms release their 2011 numbers, which in turn gives hints on possible first quarter 2012 results,” he added.

Resistance is at the 4,950 to 4,970 range with support at 4,890 to 4,920.

Index recomposition
Meanwhile, the local bourse said that there will be no changes in the composition of the main PSE index (PSEi) effective March 12, following a regular review of the index covering trading activity for the full year 2011.

“The rules we have adopted last year pertaining to the management of the index provide firmer support for stability and predictability in the index. The rally of the index shows that this composition indeed represents the positive investor sentiment in the market,” said Hans Sicat, PSE president and chief executive officer.

Among the enhancements included in the Exchange’s Policy on Index Management are Rules for Insertions and Removals to provide stability in the selection of PSEi-member companies.

Under the said rules, a company shall be inserted in the PSEi, a basket of 30 publicly-traded shares regarded as the benchmark of the market’s overall performance, if it rises above the 25th position by full market capitalization (MCAP), to replace the company that ranks the lowest.

To be included in the PSEi, a listed company must satisfy three criteria: a free float level of at least 12 percent of the outstanding shares of a listed stock; it must be among the top 25 percent by median daily value turnover per month for at least nine out of 12 months; and its common stocks must rank among the top 50 percent in terms of median daily trade per month in eight out of the 12 month period in review.

In a disclosure, the bourse said that 11 companies will be added to the current composition of the various sector indices, while 13 companies will be removed.