Stocks rise for 2nd consecutive day

MANILA, Philippines — Local share prices followed Asian and Wall Street stocks higher yesterday after the Federal Reserve chairman downplayed the likelihood of bigger rate hikes following the US central bank’s biggest increase in two decades.

At the same time, domestic investors picked up more bargains as positive corporate earnings reports continue to flow in.

“Bargain hunting, coupled with positive earnings reports, drove local shares up. All but nine of the index stocks closed in the green. Market breadth was likewise positive with 140 gainers, 59 losers and 37 unchanged,” AB Capital Securities said in a commentary.

The bellwether Philippine Stock Exchange index or PSEi closed at 6,868.92 yesterday, gaining 66.19 points or 0.97 percent.

The broader All Shares index went up 1.33 percent or by 48.17 points to settle at 3.663.16.

In Wall Street, the benchmark S&P 500 index climbed three percent on Wednesday for its best day in two years after the Fed raised its key interest rate by half a percentage point, or double its usual margin, but its chairman Jerome Powell said the US central bank is “not actively considering” a bigger increase.

The Fed’s rate hike and Powell’s comments “demonstrate that the Fed continues to try and orchestrate a soft landing while tackling high levels of inflation,” David Chao of Invesco said in a report.

The Fed raised its key rate to a range of 0.75 to one percent, the highest point since the coronavirus pandemic struck two years ago.

Powell’s comments appeared to be aimed at easing fears the Fed, which was accused of reacting too slowly as inflation surged last year, might be headed for an unusually large rate hike of three-quarters of a percentage point at its June meeting.

Investors worry about whether the Fed can extinguish inflation without pushing the economy into a downturn.