Shares edge higher, track Wall St rally

MANILA, Philippines — Local share prices advanced yesterday, joining other Asian markets that tracked a rally on Wall Street following reports suggesting the economy and corporate profits may be doing better than feared.

The benchmark Philippine Stock Exchange index (PSEi) closed at 7,052.16, up by 9.46 points or 0.13 percent, while the broader All Shares index gained 4.74 points or 0.13 percent to finish at 3,697.63.

Total value turnover reached P5.654 billion. Market breadth was positive, 105 to 83, while 59 issues were unchanged.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the market gained as investors digested the better-than-expected economic growth numbers for 2022, which came at a 46-year high of 7.6 percent, exceeding the government’s target of up to 7.5 percent.

Sentiment is also supported by less hawkish signals from the US Federal Reserve and local monetary authorities, he said.

On Wall Street, stocks climbed to their highest level in nearly eight weeks after the Commerce Department reported the US economy expanded at a 2.9 percent annual pace in the last quarter, ending 2022 with momentum despite higher interest rates and widespread fears of a looming recession. That beat economists’ forecasts for a 2.3 percent expansion.

More swings may still be ahead, as Wall Street digests a growing torrent of earnings and economic reports. Markets have veered up and down recently as worries about a severe recession and drop-off in profits battle against hopes the economy can manage a soft landing and the Federal Reserve may ease up on interest rates.

Other reports Thursday showed that orders for long-lasting goods from factories strengthened by more than expected in December and fewer workers applied for jobless claims than expected last week.

Strong data suggest the economy can withstand last year’s blizzard of rate hikes by the Fed, plus at least one more expected next week, without crashing to a deep recession. Higher rates intentionally slow the economy by making it more expensive to borrow to buy a home, a car or anything else on credit. They also drag down prices for stocks and other investments.