Shares rise on bargain hunting as Fed hikes rate

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THE MAIN INDEX recovered from its slump on Thursday, as investors went bargain hunting following the US Federal Reserve’s announcement of its first rate hike for the year.

The 30-company Philippine Stock Exchange index (PSEi) jumped 2.72% or 215.38 points to finish at 8,124.45 today, snapping a three-day decline that placed the market more than 12% behind its all-time high.

The all-shares index also gained 2.11% or 101.11 points to 4,890.17.

“I think that this 215-point rally of the PSEi today was a mixture of bounce plays by market participants and the end of speculation about the move of the US Federal reserve after it finally decided to raise rates,” Timson Securities, Inc. equity trader Jervin S. de Celis said in a mobile phone message.

The Fed raised interest rates by 25 basis points to a target range of 1.5% to 1.75%. The regulator also hinted at two more rate hikes for the year.

“Since the index plunged by as much as 6% for the month of March alone due to rising local inflation and rate hike fears, these news may have urged investors to buy stocks at bargain prices after the local bourse touched the 7,900 level yesterday,” Mr. De Celis added.

Regina Capital Development Corp. Managing Director Luis A. Limlingan also noted that some investors are expecting the Bangko Sentral ng Pilipinas (BSP) to keep rates unchanged after its policy meeting on Thursday.

As its meeting ended after financial markets close, the BSP announced that it is keeping its rates steady, noting that even as inflation remains elevated, it continues to be manageable as it is seen moderating in the next few months.

All sectoral indices ended on a positive note, with the property sector gaining the most at 3,703.77, up 4.3% or 152.78 points. Holding firms followed with an increase of 2.93% or 230.38 points to 8,088.56. Mining and oil rose 2.32% or 248.42 points to 10,939.62; services climbed 1.87% or 31.30 points to 1,703.50; industrials added 1.36% or 153.04 points to 11,379.83; while financials had an uptick of 1.12% or 23.23 points to 2,092.61.

A total of 2.02 billion issues switched hands, valued at P8.37 billion. This is lower than the previous session’s turnover of P9.52 billion.

Gaining stocks prevailed for the day at 122 against the 75 that declined and 47 that remained unchanged.

Foreign investors continued selling their holdings, even as net outflows dropped to just P180.05 million from P1.51 billion on Wednesday. Timson Securities’ Mr. De Celis attributed this to the Fed’s raising of its economic growth forecast, prompting foreigners to “pull out their investments from emerging markets and place them in developed nations.”

SM Investments Corp. was among the top gainers for the day, with stocks in the company growing 5.32% to P980 apiece. Ayala Corp. also managed to regain momentum after Mitsubishi Corp. unloaded some of its shares in the firm, as it rose 2.29% to P937 each. — Arra B. Francia