PSEi ends higher as Fed minutes fuel dovish bets

 PSEi ends higher as Fed minutes fuel dovish bets

PHILIPPINE SHARES extended their gains on Thursday after the release of the minutes of US Federal Reserve’s November meeting, which fueled bets that the central bank will consider slower rate hikes moving ahead.

The Philippine Stock Exchange index (PSEi) went up by 20.19 points or 0.31% to close at 6,530.51 on Thursday, while the broader all shares index rose by 6.28 points or 0.18% to 3,422.04. 

“Philippine shares sustained the rally as investors parsed through the latest FOMC (Federal Open Market Committee) meeting minutes, which pointed to a slowdown in Fed’s tightening in the coming months,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said.

“The PSEi continued its ascent, tracking Asian peers, on the back of encouraging statements from the Fed’s minutes, which hinted at the likelihood of the central bank slowing pace of rate hikes, and China’s economic stimulus rollout,” AP Securities, Inc. Equity Research Analyst Carlos Angelo O. Temporal said in a Viber message.

Mr. Temporal added that despite the PSEi’s rise, the market remained cautious as uncertainties over the Fed’s policy stance remain, with investors awaiting more data to cement this dovish view.

“The market was further buoyed by sustained uptrend in net foreign buying following the significant appreciation of peso against the dollar to levels below 57,” he said.

Minutes of the Fed’s policy meeting this month where they delivered a fourth straight 75-basis-point (bp) hike showed a “substantial majority” of policy makers agreed it would soon be appropriate to look at smaller increases.

The FOMC has raised rates by 375 bps since March as it battles elevated inflation. Its next meeting is on Dec. 13-14.

Meanwhile, China on Wednesday said they could cut banks’ reserve requirement ratio to help stimulate the economy amid a pickup in coronavirus cases.

At home, the peso on Wednesday returned to the P56-per-dollar level for the first time in two months, closing at P56.94. It climbed further on Thursday, ending the session at P56.78 against the greenback.

Most sectoral indices closed higher on Thursday. Financials climbed by 25.60 points or 1.56% to 1,661.81; holding firms went up by 34.31 points or 0.55% to 6,224.42; services gained 6.26 points or 0.37% to 1,665.16; and mining and oil added 9.08 points or 0.09% to end at 9,811.30.

Meanwhile, industrials declined by 52.17 points or 0.54% to 9,541.32 and property went down by 3.49 points or 0.12% to 2,876.19. 

Value turnover inched up to P5.89 billion on Thursday with 663.97 million shares changing hands from the P5.88 billion with 802.39 million shares traded on Wednesday.

Decliners narrowly outnumbered advancers, 94 versus 87, while 49 names closed unchanged. 

Net foreign buying rose to P655.85 million on Thursday from P423.97 million on Wednesday. 

AP Securities’ Mr. Temporal placed the PSEi’s immediate support at 6,200 and resistance at 6,600. — A.E.O. Jose