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Stocks up, peso ends sideways after fresh Fed rate hike

By Joann Villanueva

May 4, 2023, 8:18 pm

<p><strong>RISK-ON</strong>. The main equities index rose on Thursday (May 4, 2023) despite the latest and widely expected 25 basis points increase in the Federal Reserve's key rates after the two-day meeting of the Federal Open Market Committee. The peso ended the day sideways against the US dollar. <em>(PNA graphics)</em></p>

RISK-ON. The main equities index rose on Thursday (May 4, 2023) despite the latest and widely expected 25 basis points increase in the Federal Reserve's key rates after the two-day meeting of the Federal Open Market Committee. The peso ended the day sideways against the US dollar. (PNA graphics)

MANILA – All counters in the local bourse ended Thursday with gains despite another hike in the Federal Reserve’s key rates while the peso closed sideways against the greenback.

The Philippine Stock Exchange index (PSEi) index inched up by 1.12 percent, or 74.08 points, to 6,680.77 points.

All Shares followed with a jump of 0.77 percent, or 27.24 points, to 3,552.42 points.

Property led the sectoral indices after it rose by 1.61 percent, followed by Industrial, 1.37 percent; Financials, 1.33 percent; Mining and Oil, 1.16 percent; Holding Firms, 0.59 percent; and Services, 0.24 percent.

Volume reached 592.68 million shares amounting to PHP3.2 billion.

“Investors continued to buy into market ahead of the Philippine CPI (consumer price index) report tomorrow morning, and after the Fed (Federal Reserve) hiked rates by another 25 basis points and investors’ fears of contagion in the regional bank space returned,” said Luis Limlingan, Regina Capital Development Corp. head of sales.

After the two-day meeting of the Federal Open Market Committee (FOMC) from May 2 to 3, the Federal Reserve’s key rates were hiked to between 5 percent and 5.25 percent.

Limlingan cited the FOMC’s hint for a likely pause in rate tightening moves following the statement issued after the FOMC meeting did not include the wordings “the committee anticipates that some additional policy firming may be appropriate.”

Meanwhile, the peso ended the day sideways against the greenback at 55.35 from 55.335 the previous day.

It opened the day at 55.2, better than its 55.34 start in the previous session, trading between 55.38 and 55.13, and resulting in an average of 55.201.

Volume rose to USS1.37 billion from Wednesday’s USD1.05 billion.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the Fed rate hike is widely expected but investors have noted the change in the post-meeting statement of the Fed.

He also noted Fed Chairman Jerome Powell’s statement that FOMC’s inflation outlook does not support the rate cuts.

For Friday, the currency pair is expected to trade between 55.25 and 55.45. (PNA)

 

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