RISK-ON. The local bourse was all green on Thursday (July 28, 2022) after the additional 75 basis points increase in the Federal Reserve's key rates. However, the peso weakened against the US dollar. (PNA file photo)

MANILA – Risk-on sentiments buoyed the local bourse on Thursday due in part to the additional hike in the Federal Reserve’s key rates but the peso weakened against the US dollar.
 
The Philippine Stock Exchange index (PSEi) jumped by 2.28 percent, or 142.50 points, to 6,379.26 points. 
 
All Shares followed with a 1.61 percent, or 54.38 points, increase to 3,424.96 points. 
 
All the sectoral gauges also gained during the day, led by Financials, which rose 3.18 percent. 
 
Trailing behind were Holding Firms, 2.70 percent; Services, 1.91 percent; Property, 1.86 percent; Mining and Oil, 1.36 percent; and Industrial, 0.95 percent. 
 
Volume was thin at 567.76 million shares amounting to PHP4.73 billion. 
 
Advancers led decliners at 140 to 50, while 40 shares were unchanged. 
 
Luis Limlingan, Regina Capital Development Corp. head of sales, attributed the positive sentiments in the local equities market to another 75 basis points increase in the Federal Reserve’s key rates, announced after the July 26-27 meeting of the Federal Open Market Committee (FOMC). 
 
Limlingan said markets noted Fed Chair Jerome Powell’s hint of a possible slower tightening in the next FOMC meeting, as well as the statement that the US has not entered a recession. 
 
“Investors looking for further clues into the state of the economy are awaiting a reading on second-quarter GDP (gross domestic product) slated for Thursday,” he said. 
 
Meanwhile, the peso weakened against the US dollar, closing at 55.82, compared to its 55.68 close on Wednesday. 
 
It started the day at 55.58, a depreciation compared to the 55.40 opening in the previous session, and traded between 55.97 and 55.55, bringing the day’s average to 55.72. 
 
Volume reached USD1.27 billion, higher than the USD1.007 billion on Wednesday.
 
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso’s performance would be a major consideration for additional hikes in the Bangko Sentral ng Pilipinas’ (BSP) key rates. 
 
Ricafort said the off-cycle 75 basis points increase in the BSP’s key policy rate on July 14 supported the peso in line with the central bank’s inflation-targeting framework. 
 
“This would also help better manage/anchor both actual inflation and inflation expectations,” he said. 
 
The BSP’s policy-making Monetary Board will have its rate-setting meeting on August 18.
 
Ricafort said the Board is projected to hike the central bank’s key rates by 25 basis points to 50 basis points. (PNA)