STOCKS ended higher on Thursday after minutes of the US Federal Reserve’s meeting showed it will stay the course on its planned rate hikes, as well as the next administration’s announcement of members of its economic team.
The benchmark Philippine Stock Exchange index (PSEi) gained by 47.76 points or 0.72% to close at 6,645.52 on Thursday, while the broader all shares index inched up by 14.61 points or 0.41% to 3,568.65.
“Philippine equities rallied for the second straight day in tandem with the rally in global stocks as investors welcomed minutes of the Federal Reserve’s May policy meeting indicating that the central bank is prepared to raise rates further to contain inflation,” Papa Securities Corp. Equities Strategist Manny P. Cruz said in a Viber message.
Regina Capital Development Corp. Head of Sales Luis A. Limlingan said the Fed’s minutes indicated a broad consensus for 50-basis-point (bp) hikes at its June and July meetings.
All participants of the Fed’s May 3-4 policy meeting backed a half-percentage-point rate increase to combat inflation they agreed had become a key threat to the economy’s performance and was at risk of racing higher without action by the central bank, Reuters reported.
This month’s 50-bp hike in the Fed’s benchmark overnight interest rate was the first of that size in more than 20 years and “most participants” judged that further hikes of that magnitude would “likely be appropriate” at the Fed’s policy meetings in June and July, according to the minutes.
Meanwhile, Papa Securities’ Mr. Cruz said the market cheered the announcement that current Bangko Sentral ng Pilipinas Governor Benjamin E. Diokno would be the next Finance chief.
He said this could “provide confidence in the incoming administration given his growth-driven stance on the economy.”
President-elect Ferdinand “Bongbong” R. Marcos, Jr. on Thursday announced some planned members of his economic team, including Mr. Diokno.
Mr. Diokno said in a briefing on Thursday that he is “committed to observe continuity of sound macro (macroeconomic) and fiscal policies that have helped position the Philippines among the most resilient emerging economies in the world.”
The majority of the sectoral indices ended in gains except for mining and oil, which fell by 137.85 points or 1.17% to 11,592.20, and property, which declined by 17.50 points or 0.58% to 2,987.64.
Meanwhile, services climbed by 31.93 points or 1.71% to 1,897.84; industrials went up by 141.07 points or 1.52% to 9,383.77; financials improved by 14.59 points or 0.92% to 1,589.54; and holding firms added 8.77 points or 0.14% to end at 6,098.52.
Advancers narrowly beat decliners, 96 versus 90, while 44 names ended unchanged.
Value turnover slightly increased to P6.06 billion on Thursday with 839.74 million shares changing hands from P5.99 billion with 1.03 billion issues seen on Wednesday.
Foreigners turned net buyers with P270.74 million versus the P382.62 million in net selling seen the previous trading day. — Luisa Maria Jacinta C. Jocson with Reuters