PSEi rebounds on rate hike hints, Wall Street rise

PHILIPPINE SHARES rebounded on Wednesday after the Bangko Sentral ng Pilipinas (BSP) chief hinted at an off-cycle rate hike as early as this week and amid strong earnings of US firms.

The Philippine Stock Exchange index (PSEi) went up by 14.78 points or 0.24% to close at 6,054.50 on Wednesday, while the broader all-shares index climbed by 4.14 points or 0.12% to end at 3,288.83.

“Shares on the Philippine Stock Exchange ended their five-day losing streak after the Philippine central bank signaled it may raise its key interest rate as early as this week, while investors cheered the approval of a trillion-yuan sovereign bond issue as a harbinger of stimulus,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

The central bank may hike benchmark rates this week or next to help stem growing price pressures, BSP Governor Eli M. Remolona, Jr. said on Tuesday.

The Monetary Board raised borrowing costs by 425 basis points from May 2022 to March 2023 before holding its policy rate steady at a near 16-year high of 6.25% in its last four meetings.

The BSP is scheduled to hold its next policy meeting on Nov. 16, barring an off-cycle move.

Meanwhile, sentiment improved as Wall Street closed higher following the strong third-quarter earnings of big US firms, Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Wall Street ended higher on Tuesday as a spate of solid corporate earnings and upbeat forecasts stoked investor risk appetite and sparked a broad rally, Reuters reported.

Third-quarter earnings season has shifted into high gear, and this week nearly a third of the companies in the S&P 500 are expected to post results.

Indeed, of the 118 S&P 500 companies that have reported so far, 81% have beaten analysts’ expectations, according to LSEG.

The Dow Jones Industrial Average rose 204.97 points or 0.62% to 33,141.38; the S&P 500 gained 30.64 points or 0.73% to 4,247.68; and the Nasdaq Composite added 121.55 points or 0.93% to 13,139.88.

At home, sectoral indices were split on Wednesday. Financials climbed by 11.25 points or 0.65% to 1,723.45; holding firms increased by 33.53 points or 0.58% to 5,815.93; and industrials went up by 15.89 points or 0.18% to 8,654.21.

Meanwhile, services fell by 6.36 points or 0.43% to 1,470.86; property declined by 10.86 points or 0.42% to 2,561.55; and mining and oil dropped by 16.80 points or 0.16% to 9,933.93.

Value turnover went up to PHP 3.63 billion on Wednesday with 977.71 million shares changing hands from the PHP 2.57 billion with 275.90 million issues seen on Tuesday.

Decliners narrowly outnumbered advancers, 83 versus 80, while 51 shares closed unchanged.

Net foreign buying stood at P20.08 million on Wednesday versus the PHP 633.34 million in net selling seen on Tuesday. — SJT with Reuters