PSEi surges as Fed’s 75-bp hike eases uncertainty

STOCKS rose following another 75-basis-point (bp) rate hike from the US Federal Reserve and less hawkish comments from its chief.

The Philippine Stock Exchange index (PSEi) went up by 142.50 points or 2.28% to close at 6,379.26 on Thursday, while the broader all shares index increased by 54.38 points or 1.61% to 3,424.96.

“Fed hiking rates by a widely-expected 75 bps has cleared the markets from the 100-bp uncertainty, leading to the market upswing that we saw earlier,” AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message.

“The local bourse notched a winning session, following a widely expected 75-bp rate hike from the Fed. Chairman Jerome Powell hinted that the central bank could slow the pace of tightening by the next policy meeting,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Investors also cheered on his statement that the US economy hasn’t entered a recession,” Mr. Limlingan added.

He said investors are waiting for the release of US second quarter gross domestic product (GDP) data to gauge the state of the world’s largest economy.

The Fed on Wednesday raised its policy rate by 75 bps for a second straight meeting, bringing total interest hikes since March to 225 bps.

After the meeting, Mr. Powell said while the labor market remains strong, other economic indicators have softened. He also hinted at an eventual slowdown in hikes.

US economic growth likely rebounded moderately in the second quarter as companies boosted exports and maintained a strong pace of spending on equipment, which could assuage financial market fears that the economy was already in recession, Reuters reported.

The US Commerce Department’s advance second-quarter GDP report on Thursday will, however, still show that the economy was losing momentum because of high inflation that has prompted the Fed to aggressively tighten monetary policy.

Back home, all sectoral indices ended in the green on Thursday. Financials jumped by 47.04 points or 3.18% to 1,526.47; holding firms climbed by 159.91 points or 2.70% to 6,079.42; services went up by 31.15 points or 1.90% to 1,663.69; property increased by 51.78 points or 1.86% to 2,834.06; mining and oil rose by 154.01 points or 1.36% to 11,466.31; and industrials added 88.78 points or 0.94% to end at 9,448.02.

Advancers outnumbered decliners, 140 versus 50, while 40 names closed unchanged.

Value turnover climbed to P4.73 billion on Thursday with 567.76 million shares changing hands from the P3.83 billion with 325.86 million issues seen the previous day.

Net foreign selling increased to P166.42 million from the P136.75 million seen on Wednesday.

AP Securities’ Mr. Temporal placed PSEi’s support at 6,000 and resistance at the 6,400 area, while Regina Capital’s Mr. Limlingan put the PSEi’s support at 6,100 and resistance at 6,400. — J.I.D. Tabile with Reuters