Philippine shares rose on Thursday on bargain hunting and as markets expect the US Federal Reserve to keep rates steady next week, even after US consumer inflation picked up in August.
The benchmark Philippine Stock Exchange index (PSEi) went up by 59.22 points or 0.96% to end at 6,208.40 on Thursday, while the broader all shares index increased by 22.50 points or 0.67% to close at 3,353.31.
“Stocks rebounded as bargain hunters came in when the local equities market became technically oversold,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said in a Viber message.
“Aiding market sentiment was the hope that the US Fed is unlikely to raise their benchmark rate this month. This, despite higher August inflation reported last night,” he added.
Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message that investors saw bargain-hunting opportunities after the PSEi dropped to the 6,100 level on Wednesday.
“Helping in the climb were the expectations that the Federal Reserve would keep policy rates unchanged in its next meeting after the US August core inflation rate continued to decline to 4.3% from 4.7% in the preceding month,” he said.
US consumer prices increased by the most in 14 months in August as the cost of gasoline surged, but the annual rise in underlying inflation was the smallest in nearly two years, likely giving the Federal Reserve cover to leave interest rates unchanged next Wednesday, Reuters reported.
The mixed report from the Labor department on Wednesday was published a week before the Fed’s policy meeting and followed data this month showing an easing in labor market conditions in August. Economists, however, believe officials at the US central bank will continue to signal an additional rate hike this year given the stickiness in services inflation.
The US CPI went up by 0.6% in August after rising by 0.2% in the last two months.
In the 12 months through August, consumer prices picked up by 3.7% after rising by 3.2% in July.
“At home, many cheered the local banking industry’s nonperforming loan ratio for July as it remained steady at 3.43% on a month-on-month basis and was lower than the same period of last year’s 3.57% despite a high interest rate environment,” Mr. Plopenio added.
All sectoral indices went up on Thursday. Holding firms rose by 84.75 points or 1.44% to 5,942.05; mining and oil climbed by 108.42 points or 1.04% to 10,502.07; services went up by 14.14 points or 0.93% to 1,523.15; property increased by 19.99 points or 0.78% to 2,566.62; financials gained 5.68 points or 0.31% to end at 1,795.72; and industrials added 26.23 points or 0.29% to close at 8,843.82.
Value turnover declined to PHP 3.81 billion on Thursday with 411.99 million shares changing hands from the PHP 4.73 billion with 740.94 million issues seen on Wednesday.
Decliners and advancers ended at 92 each, while 35 names closed unchanged.
Net foreign selling dropped to PHP 11.74 million on Thursday from PHP 436.53 million on Wednesday. — SJT with Reuters
This article originally appeared on bworldonline.com