STOCKS went up on Thursday as minutes of the US Federal Reserve’s September meeting showed the central bank recognizes the possible economic impact of their aggressive policy stance and ahead of the release of latest US consumer price index (CPI) data.
The benchmark Philippine Stock Exchange index (PSEi) climbed by 42.01 points or 0.71% to close at 5,895.64, while the broader all shares gained 9.17 points or 0.29% to finish at 3,164.75.
“Stocks edged higher today as investors gained some optimism from the US Federal Open Market Committee minutes last night. The Fed provided a hint that they are mindful of the possibility that an over aggressive hawkish stance may damage the global economies,” AB Capital Securities, Inc. Vice-President Jovis L. Vistan said on Thursday.
“In their minutes, the Fed said that in the current highly uncertain global economic and financial environment, it would be important to calibrate the pace of further policy tightening with the aim of mitigating the risk of significant adverse effects on the economic outlook,” Mr. Vistan said.
The minutes of the Fed’s Sept. 20-21 meeting showed policy makers agreed they need to continue raising interest rates and keep them higher for longer to keep inflation under control.
Many Fed officials also emphasized the importance of staying the course as the cost of letting inflation go unchecked could outweigh the risks that could emanate from further tightening.
The Fed has raised rates by 300 basis points (bps) since March, with the latest move being a third straight 75-bp hike at the September meeting.
Meanwhile, Philstocks Financial, Inc. Research Analyst Claire T. Alviar said index heavyweights pulled up the market despite negative sentiment and cautiousness ahead of the release of US CPI data overnight.
“Most investors are bracing for the US inflation rate. The hawkish stance of the Federal Reserve where it sees that higher rates will remain to manage inflation. This may have a negative effect on the peso which is still depreciating against the US dollar,” Ms. Alviar added.
Back home, all sectoral indices went up on Thursday except for mining and oil, which declined by 60.04 points or 0.57% to close at 10,353.79.
Meanwhile, services gained 14.77 points or 0.97% to finish at 1,537.72; holding firms rose by 47 points or 0.83% to 5,665.21; financials went up by 9.35 points or 0.62% to 1,507.58; property climbed by 8.73 points or 0.35% to 2,493.54; and industrials gained 28.80 points or 0.33% to end at 8,687.19.
Value turnover went down to P3.65 billion on Thursday with 458.54 million shares changing hands from the P3.70 billion with 1.27 billion issues traded on Wednesday.
Decliners outnumbered advancers, 101 versus 71, while 41 names closed unchanged.
Net foreign selling declined to P29.88 million on Thursday from the P327.60 million recorded on Wednesday. — A.E.O. Jose