Stocks rebounded Thursday, after the US Federal Reserve kept interest rates unchanged but opened the door for another hike next month.
The Philippine Stock Exchange index, the 30-company benchmark, rose 73 points, or 1 percent, to close at 7,755.75, as five of the six major sectors advanced. Only mining and oil declined, a day after the sub-sector surged on news that Congress rejected the designation of anti-mining Environment Secretary Regina Lopez.
The heavier index, representing all shares, also went up 32 points, or 0.7 percent, to settle at 4,636.10, on a value turnover of P7.5 billion. Gainers outnumbered losers, 116 to 80, while 47 issues were unchanged.
Eighteen of the 20 most active issues ended in the green, led by Apex Mining Company Inc. which climbed 6.4 percent to P2 and casino operator Bloomberry Resorts Corp. which rose 3.7 percent to P9.65. Food manufacturer Universal Robina Corp. gained 2.4 percent to P178.30.
Meanwhile, Asia markets closed mixed Thursday, with Australian and Chinese stocks declining on lower metal prices and Korean shares posted record high, building on gains as foreign investors snapped up shares.
After a closely watched meeting, the US central bank gave a broadly positive view of the world’s top economy and said a recent spout of soft data, including below-par first-quarter growth, were “likely to be transitory” and that activity would pick-up over the year.
The Fed’s statement fanned expectations it will announce another rate lift next month—the second since December—as long as data points in the right direction.
Focus now turns to the release Friday of the government’s jobs creation data for April and statements from Fed boss Janet Yellen as well as other top bank officials, which could provide some forward guidance to markets.
“The Fed has doubled down on its confidence that the US economy is still on track for more rate rises and growth will bounce back from the first quarter’s moribund pace,” Greg McKenna, chief market strategist at AxiTrader, said in a note.
The dollar headed towards the 113 yen mark Thursday, building on a recent rally, while it held up against the euro and pound. It also advanced against most high-yielding currencies including the Australian dollar, Indonesia’s rupiah and the Thai baht.
The pound saw a brief dip in Asian trade as rumors circulated–but have since been reported as untrue—that Queen Elizabeth II’s husband Prince Philip had died, which fueled worries of fresh political instability in Britain.
“The Federal Reserve remains on track to deliver two more interest rate hikes this year as it focuses on the steady decline in the unemployment rate, rather than fluctuations in [economic] growth,” said Richard Jerram, chief economist at Bank of Singapore.
Despite the positive spin from the Fed, Asian equities mostly struggled Thursday in a week that has seen several markets closed for various public holidays.
Hong Kong slipped 0.3 percent in the afternoon, Shanghai ended down 0.3 percent and Singapore shed 0.4 percent.
Wellington and Taipei were down 0.4 percent each.
Sydney sank 0.3 percent on a drop in iron and copper prices. BHP Billiton ended flat, reversing early losses that came after Australia blocked a plan by one of the mining giant’s top shareholders to move its primary listing to London. With AFP, Bloomberg