PH stocks rebound as Fed hints at policy easing

Philippine shares rebounded on Thursday on improved investor sentiment as the US Federal Reserve kept rates steady at its final meeting this year, with its chief saying they are done hiking borrowing costs.

The Philippine Stock Exchange index rose by 154.74 points or 2.47% to end at 6,410.48 on Thursday, while the broader all shares index climbed by 55.82 points or 1.67% to close at 3,394.96. 

“This Thursday, the local market rose by 154.74 points to 6,410.48 as investors cheered the Federal Reserve’s dovish outlook after it held policy rates unchanged in its recent meeting. The Federal Reserve stated that they anticipate three possible rate cuts for 2024, to be done in 25-basis-point (bp) increments,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.

“This gave hope that the Fed may ease their policy soon after more than a year-long combat against inflation. As a result, the bourse was in the green territory for the whole session and even breached the 6,400 resistance level,” he added. 

The Federal Reserve left interest rates unchanged on Wednesday and US central bank chief Jerome H. Powell said the historic tightening of monetary policy is likely over as inflation falls faster than expected and with a discussion of cuts in borrowing costs coming “into view,” Reuters reported.

“People are not writing down rate hikes” in their latest economic projections, Mr. Powell said in a press conference following the end of the central bank’s final policy meeting of the year.

“That’s us thinking we’ve done enough,” he said, adding that rate increases were “not the base case anymore.”

“Locally, investors bought into the assumption that the Bangko Sentral ng Pilipinas (BSP) would follow in a similar fashion, maintaining its own policy rate, but reducing this next year,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The BSP on Thursday kept its policy rate steady at a 16-year high of 6.5% for a second straight meeting, as expected by 15 of 17 analysts in a BusinessWorld poll conducted last week, but said there is a need to remain hawkish amid lingering upside risks to inflation.

Most sectoral indices ended higher on Thursday. Holding firms increased by 228.11 points or 3.82% to 6,185.79; property rose by 96.92 points or 3.51% to 2,851.14; financials went up by 27.77 points or 1.64% to 1,719.58; industrials gained 144.33 points or 1.64% to end at 8,926.87; and mining and oil climbed by 61.44 points or 0.64% to 9,573.89. 

Meanwhile, services slipped by 6.28 points or 0.4% to 1,546.28.

Value turnover went up to P6.78 billion on Thursday with 385.71 million issues changing hands from the P3.55 billion with 245.11 million shares seen the previous day.

Advancers overwhelmed decliners, 120 against 59, while 44 names ended unchanged.

Net foreign selling climbed to P367.52 million on Thursday from P280.55 million on Wednesday. — with Reuters