PSEi posts weekly gain on firms’ strong results

PHILIPPINE SHARES closed higher on Friday amid strong corporate earnings results and ahead of the US Federal Reserve’s monetary policy meeting this week.

The benchmark Philippine Stock Exchange index (PSEi) went up by 0.62% or 41.40 points to close at 6,625.08 on Friday, while the broader all shares index rose by 0.67% or 23.67 points to end at 3,532.53.

Week on week, the PSEi gained by 1.6% or 104.64 points from its 6,520.44 finish on April 20.

“The PSEi corrected higher for the second straight week after declining for most weeks since February,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“The market managed to edge higher for the second straight week, which we attribute to: strong earnings results thus far, and prospects of the US Fed concluding its rate hike cycle,” China Bank Securities Corp. Research Associate Lance U. Soledad said in an e-mail.

US data released on Friday confirmed inflation is cooling, which could allow the Fed to pause after this week’s expected rate hike, Reuters reported.

The US central bank is expected to increase interest rates by another 25 basis points (bps) at its May 2-3 meeting.

The Fed has raised its policy rate by 475 bps since March 2022 from the near-zero level to the current 4.75%-5% range.

Though inflation is gradually slowing, it remains elevated. The personal consumption expenditures (PCE) price index gained 0.1% in March, the smallest increase since last July, after rising 0.3% in February.

In the 12 months through March, the PCE price index increased 4.2%. That was the smallest advance since May 2021 and followed a 5.1% rise in February.

Excluding the volatile food and energy components, the PCE price index rose 0.3%, matching February’s gain. The so-called core PCE price index gained 4.6% on a year-on-year basis in March after rising 4.7% in February.

The Fed tracks the PCE price indexes for its 2% inflation target.

Mr. Soledad added that continued net foreign buying contributed to the higher week-on-week close of the PSEi.

Net foreign buying rose to PHP 435.61 million on Friday from PHP 79.48 million on Thursday.

Sectoral indices were split on Friday. Industrials rose by 1.64% or 153.78 points to 9,505.89; holding firms climbed by 1.28% or 81.46 points to 6,405.79; and property went up by 0.99% or 26.99 points to 2,735.49.

Meanwhile, services dropped by 0.91% or 14.82 points to 1,605.20; financials went down by 0.46% or 8.89 points to 1,918.13; and mining and oil declined by 0.15% or 16.49 points to 10,586.54.

Value turnover stood at PHP 8.34 billion on Friday with 899.96-million shares changing hands, rising from the PHP 4.69 billion with 549.17-million issues traded on Thursday.

Advancers outnumbered decliners, 102 versus 100, while 43 names closed unchanged.

The stock market is closed on May 1 for Labor Day. — By AHH with Reuters