Local stocks tracked a Wall Street rally on Friday after a top Federal Reserve official said he would back a small interest-rate hike at its next meeting but hinted at a possible summer pause to see how tighter policy has impacted inflation.
The PSE index, the 30-company benchmark, rose 32 points, or 0.50 percent, to close at 6,655.37 as five of the six subsectors advanced, with only the property shares losing value.
The broader index representing all shares also went up 15 points, or 0.43 percent, to settle at 3,564.42 on a value turnover of P6.48 billion. Gainers led losers, 84 to 73, while 52 issues were unchanged.
Seven of the 10 most active stocks ended in the green, led by Metro Pacific Investments Corp. which climbed 7.40 percent to P4.50 and Bank of the Philippine Islands which added 3.65 percent to finish at P107.90.
Meanwhile, the peso appreciated 0.35 percent to close at 54.82 against the US dollar Friday from 55.01 Thursday.
Asian markets also recovered Friday. A strong run of data sent chills through trading floors in February — wiping out almost all January’s rally—as investors realized the US central bank had more work to do to control prices.
The unease largely overshadowed optimism about China’s recovery after officials ended three years of strict zero-Covid containment measures that battered the world’s number two economy.
Several Fed policymakers have lined up this year to insist that while inflation is coming down, they remain determined to keep hiking rates until they hit their two percent target.
The latest indicators have led investors to bet on rates hitting a peak of 5.5 percent, though six percent has also been mooted, putting further downward pressure on equities.
However, while talk has been swirling that the central bank could hike rates by 50 basis points at its March meeting, traders were given some much-needed hope by Atlanta Fed chief Raphael Bostic, who said he favored a 25-point move.
He also questioned whether it should go much higher than 5.25 percent from the current 4.5-4.75 percent. That would allow the bank to pause its tightening in the summer.
“I let the data guide me,” he said. “If the data continue to come in suggesting the economy is stronger than I had projected, I’ll adjust my policy trajectory.”
His comments came after he and Minneapolis boss Neel Kashkari called for more hikes and for rates to be held for some time into next year.
Meanwhile, figures released Thursday showed that eurozone inflation remained sticky in February, leading European Central Bank chief Christine Lagarde to say more tightening was needed.
All three main indexes on Wall Street ended in the green, with the Dow up more than one percent.
And Asia followed suit. Tokyo piled on more than one percent, alomg with Hong Kong and Mumbai, while Shanghai, Sydney, Seoul, Singapore, Taipei and Manila also enjoyed their time in the sun.
London, Paris and Frankfurt rose at the open.
SPI Asset Management’s Stephen Innes said that while markets remained uncertain, “unlike last year, where policy shocks drove market shifts through most of the year, this year’s price action has been driven as much by improving global growth as by tighter global policy”.
“Indeed, that is a more digestible mix for stock market operators. Still, the uptick in January inflation has muddied this picture and caused a fair bit of panic in market circles.”
However, he warned: “As long as activity data remain too strong, fanning the inflation fires, the real vulnerability for risk assets is a definitive hawkish policy shift, particularly from Chair (Jerome) Powell, who represents the core members.” With AFP