Stocks gain anew as BSP hikes rates

MANILA, Philippines — Share prices advanced for a second straight day, ending at their highest in three and a half months, as traders digest the interest rate increase by the Bangko Sentral Pilipinas (BSP) in efforts to tame rising inflation.

The benchmark Philippine Stock Exchange index (PSEi) finished at 6,836.86, up 39.23 points or 0.57 percent, while the broader All Shares index gained 15.80 points or 0.44 percent to end at 3,635.57.

“The PSE index inched up, gaining 2.5 percent week-on-week, as investors welcomed the broadly expected 50-basis-point rate hike of the BSP,” AB Capital Securities said in a note.

For its part, Unicapital Securities said yesterday’s session comes after the BSP’s rate hike which investors are digesting and sees support within the 6,400 level.

Total value turnover thinned to P5.146 billion, although market breadth was positive, 113 to 80, while 49 issues were unchanged.

In other Asian markets, stock were mixed after Wall Street rose as investors analyzed conflicting economic signals ahead of a Federal Reserve conference next week.

Wall Street rebounded after corporate results and fewer unemployment claims than expected suggested the US economy has pockets of resiliency despite repeated interest rate hikes.

Investors worry the Fed and central banks in Europe and Asia might derail global economic growth as they hike rates to cool inflation that is running at multi-decade highs.

The latest US data “might keep the door open for aggressive Fed tightening,” said Edward Moya of Oanda in a report.

Investors looked ahead to the Fed’s annual Jackson Hole conference in Wyoming next week for indications of when and how much the US central bank might raise rates.

Minutes on the Fed’s July meeting released this week said inflation still is too high and made clear the central bank will keep raising interest rates.

The Fed has raised interest rates twice this year by 0.75 percentage point,  triple its usual margin. Forecasters expect a hike at the board’s September meeting, but say pressure for a similarly large increase has declined as economic growth cooled.