PHILIPPINE SHARES inched up on Monday to track Wall Street’s rebound amid dovish comments from a US Federal Reserve official.
The bellwether Philippine Stock Exchange index (PSEi) gained 45.23 points or 0.75% to end at 6,028.79 on Monday, while the broader all shares index went up by 21.63 points or 0.67% to close at 3,216.67.
“The PSEi eked out a gain today as the domestic market enjoyed positive spillover from offshore markets. Investor sentiment got a lift following pronouncements from a Fed official who stated that it may be time for policy makers to start discussing slowing down the pace of rate hikes,” China Bank Securities Corp. Research Director Rastine Mackie D. Mercado said in an e-mail.
Philstocks Financial, Inc. Research Analyst Claire T. Alviar said the PSEi went up amid bargain hunting as investors await the release of more corporate results.
“Moreover, the government’s announcement that it is prepared to defend the peso from falling to P60 levels against the US dollar boosted sentiment,” Ms. Alviar said. “Wall Street’s positive performance last Friday also influenced the market’s movement.”
Wall Street rose on Friday after a Fed official said the central bank should start discussing less aggressive action to stem an expected economic slowdown due to rising borrowing costs.
San Francisco Federal Reserve President Mary Daly said on Friday that the US central bank must not “over-tighten” in its quest to fight inflation.
The market is pricing in a fourth straight 75-basis-point (bp) increase in the Fed’s Nov. 1-2 meeting and more hikes on the table until next year. The Fed has raised rates by 300 bps since March.
Meanwhile, Finance Secretary Benjamin E. Diokno last week said the government plans to use its foreign exchange reserves to prevent the peso-dollar exchange rate from breaching P60 and bring it back to P55 by yearend, which is “where [they] want it to be.”
Almost all sectoral indices ended higher on Monday. Services went up by 20.73 points or 1.34% to 1,564.32; financials gained 17.63 points or 1.16% to end at 1,534.04; property rose by 26.15 points or 1% to 2,634.72; industrials added 66.31 points or 0.76% to close at 8,714.16; and holding firms climbed by 8.55 points or 0.14% to 5,755.38.
Meanwhile, mining and oil went down by 15.21 points or 0.14% to 10,671.87.
Value turnover declined to P3.48 billion on Monday with 406.76 million shares changing hands from the P4.50 billion with 429.16 million issues traded on Friday.
Advancers outnumbered decliners, 91 versus 76, while 55 names closed unchanged.
Net foreign selling dropped to P221.28 million on Monday from P402.52 million on Friday.
China Bank Securities’ Mr. Mercado placed PSEi’s support at 6,000 and resistance at 6,200, noting the market is monitoring the release of firms’ financial reports and economic data, including the US gross domestic product estimate for the third quarter. — A.E.O. Jose