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Business

Share prices climb for 3rd straight day

Iris Gonzales - The Philippine Star
Share prices climb for 3rd straight day
This file photo shows the main board of the Philippine Stock Exchange.
STAR / File

MANILA, Philippines — Local stocks rose for the third straight session yesterday which, along with other Asian shares, mostly tracked Wall Street higher as markets reacted to the possibility of the US Federal Reserve soon slowing its pace of interest rate hikes.

The benchmark Philippine Stock Exchange index (PSEi) closed at 6,530.51, up 20.19 points or 0.31 percent, while the broader All Shares index gained 6.28 points or 0.18 percent to end at 3,422.04.

Total value turnover reached P5.888 billion. Market breadth, however, was negative, 94 to 87, while 49 issues were unchanged.

Japhet Tantiangco of Philstocks Financial said the market gained strength on expectations of a slowdown in the Fed’s rate hikes, and consequently, a parallel move by the Bangko Sentral ng Pilipinas.

Asian shares gained yesterday, although optimism about the Fed holding back on aggressive interest rate raises was countered by some uncertainty about coronavirus restrictions in China.

Trading was relatively muted in Asia ahead of US markets being closed for Thanksgiving.

Minutes of the Fed’s latest meeting showed a “substantial majority” of Fed policymakers had agreed it would “likely soon be appropriate” to slow the pace of interest rate rises.

“If you are at the Fed, you’d be gnashing your teeth at seeing what happened last night in response to the FOMC minutes. The market latched on to one sentence, the dovish sounding one, and they ignored the hawkish sounding bits,” said Rob Carnell, head of ING’s Asia-Pacific research.

“A headwind for Asian markets is the COVID situation in China, where investors seem to be avoiding local assets and commodities as the country is seeing near-record numbers of COVID cases. Broad restrictions will keep weighing on risk sentiment and macroeconomic fundamentals, putting pressure on the outlook for cyclical stocks and commodities,” Anderson Alves at ActivTrades said in a commentary.

At their Nov. 1-2 meeting, Fed officials expressed uncertainty about how long it might take for their rate hikes to slow the economy enough to tame inflation. At a news conference afterward, Chair Jerome Powell stressed the Fed wasn’t even close to declaring victory in its fight to curb high inflation. Other Fed officials in the weeks since the meeting have signaled that additional hikes are still necessary.

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