Local stocks and the Philippine peso advanced Wednesday following overnight gains in New York on healthy earnings from big-name firms and as hopes for a slowdown in Federal Reserve rate hikes spread cheer.
The PSE index, the 30-company benchmark, added 49 points, or 0.8 percent, to close at 6,121,53 as four of the six subsectors advanced, led by services and holdings firms.
The broader all-share index also picked up 10 points, or 0.3 percent, to settle at 3,243.27 on a value turnover of P3.7 billion. Losers outmatched gainers, 90 to 85, while 51 issues were unchanged.
Six of the 10 most active stocks ended in the green, led by International Container Terminal Services Inc. which climbed 3.5 percent to P171.70 and SM Investments Corp. which rose 2.5 percent to P799.50.
Meanwhile, the peso sustained its rebound as it closed at 58.43 against the US dollar on trading volume of $845.50 billion, up from 58.78 on Tuesday.
Most Asian markets also ended higher. Hong Kong and Shanghai enjoyed a much-needed advance after China’s central bank and forex officials pledged support for the country’s equities, bonds and yuan, helping investors bounce back from Monday’s rout.
The mood across trading floors has been generally positive this week after a report on Friday suggested the Fed could begin discussing applying the brakes on its monetary tightening campaign aimed at fighting decades-high inflation.
That came as some bank officials hinted they could be open to the prospect of hiking by less than the 75 basis points seen after the past three meetings.
While a similar move is expected next month, there are flickers of hope that the pace could slow in December or next year.
Adding to that optimism was data indicating that higher borrowing costs were having an impact on the world’s biggest economy, with house prices falling, consumer confidence at a three-month low and weakness in the factory sector.
“A few economic reports all told a similar story… that the economy is weakening,” said OANDA’s Edward Moya. “A weakening economy will bring down inflation and that is good news for long-term investors looking to get back into equities.” With AFP
CMC Markets analyst Michael Hewson added: “There appears to be an increasing belief that a Fed pause is close.”
He pointed to comments from San Francisco Fed boss Mary Daley that it could be time to talk about stepping back after November’s hike.
All three main indexes on Wall Street rallied, with the Nasdaq up more than two percent, helped by a drop in Treasury yields.
Investors also welcomed another round of better-than-expected profits, this time from Coca-Cola and General Motors.
However, after-hours big misses from Microsoft, Texas Instruments and Google parent Alphabet soured the mood a little among tech investors and tempered early gains in Asia. With AFP