PHILIPPINE SHARES climbed on Thursday after the US Federal Reserve kept its key interest rate near zero to support the recovery of the world’s largest economy.
The Philippine Stock Exchange index (PSEi) rose by 64.02 points or 0.97% to close at 6,630.85 on Thursday. The all shares index also climbed by 40.31 points or 1.01% to finish at 4,005.09.
“Market moved up [on Thursday] in line with most regional markets as [the] US Fed maintained overnight rates to reassure the market of its tolerant stance on inflation [and] renewed emphasis on continued policy support,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said via text message.
“The PSEi climbed higher led by recently battered blue chip property and bank stocks. Trading volumes continue to decline as investors take a wait-and-see approach,” AAA Southeast Equities, Inc. Research Head Christopher John J. Mangun said in an e-mail.
The US economy is heading for its strongest growth in nearly 40 years, the Federal Reserve said on Wednesday, and central bank policy makers are pledging to keep their foot on the gas despite an expected surge of inflation, Reuters reported.
“Strong data are ahead of us,” a confident Fed Chair Jerome Powell said after a two-day policy meeting, ticking off the list of forces Fed officials expect will produce 6.5% gross domestic product growth this year — from massive federal fiscal stimulus to optimism around the success of coronavirus vaccines.
The Federal Open Market Committee’s policy statement, which kept the benchmark overnight interest rate in a target range of 0-0.25%, was unanimous.
“We are committed to giving the economy the support it needs to return as quickly as possible to a state of maximum employment,” Mr. Powell said in a briefing after the Fed released its new economic projections and latest policy statement.
Back home, all sectoral indices improved except for holding firms, which declined by 3.93 points or 0.05% to 6,694.43.
Meanwhile, financials went up by 32.05 points or 2.28% to 1,436.33; property improved by 71.29 points or 2.18% to 3,333.76; mining and oil increased by 134.28 points or 1.58% to 8,619.13; industrials rose by 54.82 points or 0.64% to 8,582.71; and services added 3.45 points or 0.24% to close at 1,438.68.
Value turnover climbed to P8.85 billion on Thursday with 3.06 billion shares switching hands from the P6.85 billion with 4.62 billion issues traded on Wednesday.
Advancers beat decliners, 149 against 64, while 41 names closed unchanged.
Net foreign selling grew to P397.96 million on Thursday from the P256.96 million seen the day prior.
“There is still some hope that the pandemic situation will improve in the coming weeks which will give the investor sentiment a boost,” AAA Southeast Equities’ Mr. Mangun said. “Until then, the market will continue sideways with a slight negative bias.” — KCGV with Reuters