Stocks rose Wednesday, following another record close on Wall Street as investors awaited the outcome of the Federal Reserve’s policy meeting, hoping for guidance on its monetary policy plans.
The Philippine Stock Exchange index, the 30-company benchmark, climbed 48 points, or 0.6 percent, to close at 7,966.01, as five of the six major sectors advanced.
The heavier index, representing all shares, also gained 21 points, or 0.5 percent, to settle at 4,729.05, on a value turnover of P18.3 billion. Advancers outnumbered losers, 97 to 85, while 50 issues were unchanged.
Thirteen of the 20 most active stocks ended in the green, led by PLDT Inc., the largest telecom company, which climbed 3 percent to P1,905 after it announced its divestment from Manila Electric Co. and Global Business Power Corp.
DMCI Holdings Inc., the investment company of the Consunji family, went up 2.8 percent to P14.90, while conglomerate JG Summit Holdings Inc. of tycoon John Gokongwei added 2.2 percent to close at P80.80.
Local stocks followed the gains in the US. The Dow Jones Industrial Average hit a high of 21,332.77 Tuesday and closed 0.4 percent higher. The S&P 500 Index added 0.5 percent to settle at a new record high.
The US Federal Reserve is all but certain to raise interest rates after its meeting ends later in the day but the main focus will be on chair Janet Yellen’s comments afterwards.
Some analysts suggest the rise could be the Fed’s last this year as traders fret over tepid inflation and the future of Donald Trump’s big-spending, tax-cutting agenda.
Hopes for those policies had fueled expectations of a surge in prices—and a jump in borrowing costs—but the agenda is now in trouble as the tycoon faces political crises.
“With the rate hike now 96 percent priced in, focus will fall on the Fed’s forward guidance and importantly their views surrounding low inflation,” Stephen Innes, senior trader at Oanda, said in a note.
The dollar moved in a tight range against the yen in Asia ahead of the Fed announcement. Equity markets were mostly down despite a strong lead from Wall Street, where the Dow and S&P 500 ended at record highs.
Tokyo ended 0.1 percent lower, while Hong Kong gave up 0.2 percent in the afternoon and Shanghai closed down 0.7 percent. Seoul was off 0.1 percent and Singapore gave up 0.2 percent. Taipei fell 0.6 percent.
However, Sydney climbed more than one percent.
The pound extended its gains after bouncing on news Tuesday that British consumer inflation rose to a near four-year high of 2.9 percent in June.
The data comes as the Bank of England ends its own policy meeting Thursday and will put pressure on the policy board to raise rates within its two percent target.
British inflation had held close to zero throughout 2015 but has surged since then as a weak Brexit-hit pound raises import costs.
The pound on Friday tumbled to a seven-week low at $1.2636 in the wake of Thursday’s election result that saw the ruling Conservatives lose their majority, days before the start of crucial talks on leaving the EU.
Oil prices sank around one percent after the American Petroleum Institute said US inventories rose last week, confounding forecasts of a drop. Attention is now on the release of government stockpiles data later Wednesday. With Bloomberg, AFP