PSEi rallies above 8,400 on Fed interest rate hike

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LOCAL EQUITIES rallied past the 8,400 level on Thursday, reflecting Wall Street’s gains, as the US Federal Reserve implemented a highly anticipated interest rate hike. 

PSEi rallies above 8,400 on Fed interest rate hikeThe benchmark index finished 1.21% or 101.45 points higher at 8,461.06 yesterday.

The broader all-shares index likewise gained 1.15% or 56.56 points to 4,938.54.

“Philippine markets gained in a similar fashion as US stocks reacted positively on news even on a widely anticipated Fed rate hike last night,” Regina Capital Development Corp. Managing Director Luis A. Limlingan said in a mobile phone message.

Results of the US Federal Open Market Committee’s (FOMC) two-day meeting which ended on Wednesday included the increase in benchmark lending rate to a target range of 1.25% to 1.5%. The FOMC also said it is mulling three more rate hikes in 2018.

The Dow Jones Industrial Average climbed 0.33% or 80.63 points to 24,585.43. The Nasdaq Composite index meanwhile added 0.20% or 13.48 points to 6,875.80, while the S&P 500 index was slightly down by 0.05% or 1.26 points to 2,662.85.

Summit Securities, Inc. President Harry G. Liu noted that the Fed rate increase has already been absorbed by the market.

“I presume the market is accepting what they see. The US market is stable even with the increased interest rates. (On it’s impact on the Philippines), it’s a very small increase, market already absorbed it,” Mr. Liu said in a phone interview.

At home, after the stock market’s close, the Bangko Sentral ng Pilipinas held fire on monetary policy as inflation remains within target and with economic growth remaining upbeat, which came despite a fresh rate hike in the US that would trigger rising global yields.

As expected, the Monetary Board kept borrowing rates unchanged during its eighth and final review for 2017. Rates were kept at 3.5% for the overnight lending rate, 3% for the overnight reverse repurchase rate, and 2.5% for the overnight deposit rate.

“A buildup in price pressures point to a monetary tightening in 2018,” Mr. Limlingan said.

The mining and oil counter was the lone sector that ended in the red on Thursday, falling by 1.02% or 119.51 points to 11,601.56.

All other sub-indices increased, with holding firms recording the largest gain at 1.79% or 151.11 points to 8,572.80; followed by services, which added 1.44% or 22.96 points to 1,609.14. The property sector was up by 0.97% or 38.22 points to 3,942.78; industrials added 0.75% or 83.96 points to 11,187.26; while financials rose 0.56% or 12.15 points to 2,170.84.

The market logged a value turnover of P7.62 billion, higher than Wednesday’s P6.3 billion, as 1.84 billion issues switched hands.

Foreigners turned buyers, logging net inflow of P1.06 billion, a reversal of Wednesday’s net sales worth P419.27 million.

Gainers outpaced losers, 110 to 103, while 33 issues were unchanged. — Arra B. Francia