MANILA, Philippines — Stocks rose for the sixth consecutive session yesterday, with the main index finishing at its highest level in over three months, as investors are now convinced of lesser interest rate hikes, as well as a potential easing in China’s strict pandemic curbs following unprecedented protests.
The 30-company Philippine Stock Exchange index or PSEI advanced by 99.31 points or 1.48 percent to close at 6,780.78, while the broader All Shares index gained 32.81 points or 0.94 percent to end at 3,513.98.
A total of P23.474 billion worth of shares changed hands yesterday as funds did their end-of-month realignment of portfolio, but market breadth was negative with 103 losers as against 88 winners, while 42 issues were unchanged.
Unicapital Securities said the PSEi continued to sustain its bullish momentum yesterday, encouraged by a slowdown in monetary policy tightening both by the US Federal Reserve and the Bangko Sentral ng Pilipinas, while the peso remains below the 57 to the dollar level.
Markets globally are pricing in comments from Fed officials who flagged a need for continued policy tightening to gain control of inflation, with no clarity on how far the central bank will need to boost short-term borrowing costs.
“The Fed speakers are very clear that in the next FOMC meeting in December, we will see a deceleration in the pace of rate hikes to 50 basis points,” said Alvin Tan, head of FX strategy at RBC Capital Markets.
Tan said that markets were anticipating slight cuts in interest rates in the second half of 2023.
“Tighter security in China yesterday has aided to refrain large-scale protests from materializing (some spillover to Hong Kong), but nevertheless, the absence of any clear escalation in protests could aid to bring some calm to markets,” analysts at IG said in a note.
Investors will be closely monitoring China’s factory activity data due Wednesday, where the world’s second-largest economy and Southeast Asia’s largest trading partner is expected to counter a deepened contraction in November as COVID-19 woes bite.