Stocks gain ahead of US Fed meeting  

MANILA, Philippines — Stock markets around Asia followed Wall Street higher ahead of a speech by the US Federal Reserve chair that investors hoped would shed light on plans for more interest rate hikes.

The main Philippine Stock Exchange index or PSEi gained 46.07 points (0.69 percent) to end at 6,752.50 while the broader All Shares index added 12.17 points (0.34 percent) to close at 3,577.45.

“The PSEi inched up as investors remained on the sidelines ahead of the Fed’s speech on the US economy and the upcoming long weekend,” said AB Capital Securities in a note.

A total of P8.82 billion worth of shares changed hands yesterday, with advances and declines almost equal at 88 and 89, respectively, while 47 issues were unchanged.

“Philippine shares extended their stay in the green as investors looked ahead to Federal Chair Jerome Powell’s speech in Jackson Hole, Friday morning,” said Luis Limlingan of Regina Capital.

“Wall Street is hoping for new guidance on how the central bank will act this autumn, but expectations are lower, with many expecting Powell to reiterate the Fed’s promise to slow inflation by raising interest rates” he added.

Limlingan pointed out that besides the symposium, investors are also keeping tabs on one of the Fed’s favorite inflation measures, the Personal Consumption Expenditures (PCE) report, which is due yesterday.

Investors focused on Powell’s speech for signs of when the US central bank, trying to cool inflation that is running at multi-decade highs, might raise rates again and by how much.

Traders worry the Fed’s four rate hikes this year, plus increases by central banks in Europe and Asia, might derail global growth. Some expect the Fed to reverse course and start cutting rates in 2023 due to signs the US economy might be cooling.

“The Fed could start thinking about a pause in rate hikes, potentially for the end of the year,” said Thomas Costerg of Pictet in a report. “However, it is still too early to talk about rate cuts.”