MANILA, Philippines — Share prices continued to advance this week, rallying big yesterday as investors cheered the milder inflation data in the US and more positive earnings results from listed firms.
“The local bourse surged by 208.84 points (up 3.23 percent), to 6,680.68 as investors cheered the slowdown of US inflation in July,” said Claire Alviar of Philstocks Financial.
US and Asian markets also went up as inflation in the US came better than expected at 8.5 percent in July, from the consensus estimate of 8.7 percent and June’s 91 percent.
The broader All Shares index likewise gained 89.06 points or 2.57 percent to close at 3,550.57.
“The latest print brings optimism as investors expect the Federal Reserve to finally slow down from its hawkish stance,” Alviar said.
All sectors ended in positive territory, with property and holding firms among the biggest gainers.
Total value turnover reached P8.625 billion. Market breadth was positive, 144 to 51, while 43 issues were unchanged.
Most Asian markets also gained after softer-than-expected US inflation data tempered worries of aggressive rate hikes by the Federal Reserve.
In the US, consumer prices in July were flat sequentially and increased by a weaker-than-expected 8.5 percent year-on-year, primarily due to a drop in petroleum prices since mid-June.
With inflationary pressures still elevated, prices data will continue to be in focus as the Fed considers if another outsized rate hike is needed in September.
“Downside surprise in the US July CPI (consumer price index) reading reinforces our expectations for CPI to grind lower over time, and for growth jitters to become more apparent into year-end, which would support some retracement of H1 dollar strength in second-half,” analysts from Maybank said in a note.
Traders are now pricing in a 50-basis-point hike next month, rather than the 75-bp increase expected before the inflation print.