The stock market rose Thursday on bargain hunting on expectations of lower inflation rate in January and improving economic prospects.
The Philippine Stock Exchange Index added 27.53 points, or 0.4 percent, to 8,007.48 on a value turnover of P10.8 billion, after profit taking in late trading capped the market gains. Losers, however, beat gainers, 110 to 97, with 41 issues unchanged.
Bangko Sentral ng Pilipinas Deputy Governor Diwa Guinigundo on Wednesday said the government’s economic growth target range of 7 percent to 8 percent for 2019 was doable on the back of higher public spending and household expenditures.
Bloomberry Resorts Corp., which operates a casino on a reclaimed part of Manila Bay, climbed 4 percent to P11.02, while Cemex Holdings Philippines Inc. gained 3.9 percent to P2.67.
Greenergy Holdings Inc., a renewable energy company, jumped 33.5 percent to P2.99, while ISM Communications Corp., a member of the consortium declared by the government as the country’s third major telecommunications firm, advanced 7.3 percent to P6.75.
The rest of Asian equities rallied and the dollar extended losses after the Federal Reserve signaled it would slow down its pace of interest rate hikes, providing some much-needed respite to investors fretting over the cost of borrowing.
Dealers are also keeping an eye on top-level talks between China and the United States aimed at resolving their long-running trade war, which kicked off on Wednesday.
Wall Street rallied, with dealers there also cheering healthy earnings from big-hitters, including Facebook and Boeing.
Those gains filtered through to Asia, where Tokyo and Hong Kong each climbed more than one percent.
Shanghai was up 0.4 percent as a gauge of factory activity in China improved slightly in January from last month.
While the Purchasing Managers Index (PMI) showed contraction, it beat forecasts, though observers warned the figures were helped by producers stepping up work ahead of the Lunar New Year next week.
Elsewhere, Singapore rose 0.7 percent while Wellington, Mumbai and Jakarta were sharply higher.
Seoul and Sydney, however, dipped.
The US central bank sparked a flurry of equity buying after chairman Jerome Powell said the case for lifting rates had “weakened somewhat” as the global economy stutters.
“In this environment, we believe we can best support the economy by being patient in evaluating the outlook before making any future adjustment to policy,” he said.
The Fed also said it could slow down the reduction of its securities holdings, which would also help keep rates lower.
“Wow—Powell to markets—we hear you and we have adjusted policy accordingly,” Chris Rupkey, chief financial economist at MUFG Union Bank, said.
The Fed “also caved on the balance sheet by saying interest rates are still the primary policy making tool, but they are prepared to adjust the pace of balance sheet normalization if economic and financial developments require it,” Rupkey added.
The news provided a further boost to markets, which were dragged for most of 2018 by concerns that rising rates would make it costlier for them to borrow to invest. With AFP