Likely Fed rate cut buoys local stocks

MANILA, Philippines — The stock market rallied yesterday after US Federal Reserve chairman Jerome Powell bolstered expectations the Fed would cut US interest rates soon, analysts said.

The main composite indexclimbed by 76.28 points, or 0.94 percent, to close at 8,154.49, while the broader All Shares index rose 35.80 points or 0.72 percent to settle at 4,957.97.

Most of the sectoral indices went up as well with the property sector sprinting to 4,438.50 or up 2.19 percent.

Total value turnover reached P6.093 billion. Market breadth was positive, 124 to 74 while 49 issues were left unchanged.

Luis Limlimgan of Regina Capital said the local market took the cue from Wall Street.

“The Fed ignited today’s rally, pushing the index closer to the 8200 resistance level.  At the Congressional testimony, Fed chairman Jerome Powell cited his intention to lower borrowing costs as soon as this month, telling the House that risks from the trade war with China overshadow the healthy labor market,” Limlingan said.

As a result, the local market rallied, following the S&P 500, which briefly pushed past 3,000 for the first time following the dovish testimony from Powell.

“The Nasdaq also closed at a record high on Wednesday with strength in the semiconductors with news that US trade delegate team had make contact with its Chinese counterparts, with plan of a China visit in the coming weeks,” he said.