PSEi logs fresh high as Fed keeps rates steady
STOCKS climbed anew on Thursday to a near eight-month high as markets cheered the US Federal Reserve’s decision to maintain rates, even as it hinted on more hikes in the future.
Thursday’s closing level is the bellwether’s best showing for this year and is also its highest finish in nearly eight months or since it closed at 7,762.35 last Sept. 22, 2016.
The all shares index likewise went up 0.71% or 32.98 points to 4,636.10.
“The market was up because of the decision of the Fed to maintain rates and to gradually increase it, which favors emerging markets. When there are low rates, the emerging markets could expand their business at low debt rates,” Diversified Securities, Inc. equities trader Aniceto K. Pangan said in a phone interview.
The Fed kept interest rates unchanged on Wednesday and downplayed weak first-quarter economic growth while emphasizing the strength of the labor market, in a sign it was still on track for two more rate rises this year.
“The Federal Reserve held interest rates unchanged and downplayed weak Q1 economic growth,” Regina Capital Development Corp. Luis A. Limlingan said.
Sectoral counters closed in positive territory except for the mining and oil sub-index, which declined 0.26% or 33.44 to close at 12,739.38 as investors pocketed gains after its rally the day prior. Regina Capital’s Mr. Limlingan said the sector would need more clarity and guidance ahead of the appointment of a new Environment department chief.
Philippine lawmakers ended a 10-month crusade by Environment Secretary Regina Paz L. Lopez on Wednesday, forcing out the eco-warrior whose mining crackdown was backed by the president but led to demands of her removal by miners.
“Until then, it will still be volatile with all the speculation, albeit less than the last few days or weeks...,” Mr. Limlingan said.
Meanwhile, the services sector gained 1.45% or 23.30 points to 1,620.04; property rose 1.21% or 41.06 points to 3,414.21; holding firms rose 0.96% or 75.52 points to 7,892.87; financials climbed 0.74% or 14.10 points to 1,907.16; and industrials went up 0.42% or 48.04 points to 11,421.36.
Advancers outpaced decliners, 116 to 80, while 47 names were unchanged.
Value turnover increased to P7.52 billion yesterday from the previous session’s P6.41 billion, with 4.77 billion issues changing hands.
Net foreign buying, however, thinned to P21.98 million from Wednesday’s net purchases worth P161.09 million.
“Resistance right now is at 7,781, while support is 7,721,” Diversified Securities’ Mr. Pangan said.
Other markets in the region were largely steady following the Fed’s decision to leave rates unchanged. -- A.B. Francia with Reuters