The stock market closed nearly flat Friday, with bargain hunters picking up select issues following a healthy performance on Wall Street overnight.
The Philippine Stock Exchange Index added 12.26 points, or 0.2 percent, to 6,606 on a value turnover of P4.3 billion. Gainers beat losers, 97 to 77, with 56 issues unchanged.
DMCI Holdings Inc. of the Consunji Group rose 1.9 percent to P10.50, while AbaCore Capital Holdings Inc. climbed 1.5 percent to P2.77.
Emperador Inc. of business tycoon Andrew Tan, the biggest liquor maker, however, fell 3.6 percent to P20.10, while SM Prime Holdings Inc. of the Sy Group, the largest mall operator, declined 2.7 percent to P36.40.
The rest of Asian markets rallied Friday, with investors largely pricing in more interest rate hikes aimed at taming runaway inflation.
The more confident mood was reflected in a dip in the dollar, which has surged in recent weeks to multi-decade highs against its major peers owing to the Federal Reserve’s hawkish tilt to tighter monetary policy.
The greenback’s softness came even after Fed chief Jerome Powell reasserted the bank’s determination to keep hiking rates to fight prices, even at the cost of economic growth.
His warning that “we need to act now forthrightly, strongly” followed comments from his deputy Lael Brainard, who said policymakers would lift borrowing costs for as long as it takes to bring inflation down from 40-year highs.
Still, Wall Street ended in positive territory, putting markets on course for a weekly gain and easing some pressure after hefty losses in August caused by worries that rising rates would spark a recession.
“The markets have finally digested the fact that rates are almost certain to go up by 75 basis points when the Fed moves next (on September 21),” JoAnne Feeney, at Advisors Capital Management, told Bloomberg TV.
“What we are seeing though is some recognition that perhaps the sell-off that we saw in the second half of August was a bit overdone,” she said.
New York’s rise filtered through to Asia, where Hong Kong rose close to three percent heading into a long weekend, while Tokyo, Sydney, Shanghai, Singapore, Wellington, Mumbai and Bangkok were also well up.
OANDA’s Edward Moya said traders cheered as “Powell stuck to his hawkish script and affirmed the commitment to tighten policy until inflation is back towards their target.
“Wall Street is expecting to see some pricing pressure relief with next week’s inflation report, but that shouldn’t derail the current 75 basis-point pace of tightening.”
There was also some cheer from news that inflation in China had eased slightly in August, giving the government more room to introduce more economy-supporting measures, though the recovery remains hostage to leaders’ strict zero-COVID strategy of growth-sapping lockdowns.
On currency markets, the euro was holding well above parity with the dollar after the European Central Bank announced its own 75 basis-point rise as it warned inflation was “far too high” and likely to stay above target for “an extended period.”