PSE in­dex hits new record on Fed rate hike bets

Business World - - THE STOCK MARKET - Lim J.C.

THE BELL­WETHER in­dex hit a fresh record high on Thurs­day fol­low­ing the min­utes from the Fed­eral Re­serve’s Septem­ber meet­ing and com­ments from cen­tral bank of­fi­cials that main­tained the US econ­omy is sta­ble enough to with­stand an­other rate hike by the end of the year.

The Philip­pine Stock Ex­change in­dex ( PSEi) climbed 0.53% or 44.34 points to 8,402.81, a fresh all-time high.

The broader all-shares in­dex rose 0.41% or 20.40 points to 4,928.28 points.

“The mar­ket wel­comed the fa­vor­able state­ments from the Fed last night, sig­nal­ing a strong US eco­nomic re­bound,” Lex­ter A. Azurin, se­nior eq­uity an­a­lyst at AB Cap­i­tal Se­cu­ri­ties, Inc., said in a text mes­sage on Thurs­day.

“Philip­pine mar­kets re­sumed the up­ward tra­jec­tory as the min­utes from the Fed­eral Open Mar­ket Com­mit­tee meet­ing con­firmed what was on many an­a­lysts’ mind,” Regina Cap­i­tal Devel­op­ment Corp. Manag­ing Direc­tor Luis A. Lim­lin­gan said.

Fed­eral Re­serve pol­icy mak­ers had a pro­longed de­bate about the prospects of a pickup in in­fla­tion and slow­ing the path of fu­ture in­ter­est rate rises if it did not, ac­cord­ing to the min­utes of the US cen­tral bank’s last pol­icy meet­ing last Sept. 19-20 re­leased on Wed­nes­day.

The read­out of the meet­ing, at which the Fed an­nounced it would be­gin this month to re­duce its large bond port­fo­lio mostly amassed fol­low­ing the fi­nan­cial cri­sis and unan­i­mously voted to hold rates steady, also showed that of­fi­cials re­mained mostly san­guine about the eco­nomic im­pact of re­cent hur­ri­canes.

Nev­er­the­less, many pol­icy mak­ers still felt that an­other rate in­crease this year “was likely to be war­ranted,” the Fed said.

The call to not lose faith in grad­ual rate rises was echoed on Wed­nes­day by two Fed pol­icy mak­ers.

Kansas City Fed Pres­i­dent Es­ther Ge­orge urged her col­leagues to be less fix­ated on the 2% in­fla­tion tar­get and ar­gued fur­ther rate hikes are nec­es­sary to ward off un­wanted in­fla­tion­ary pres­sures. Like­wise, the San Fran­cisco Fed’s John Wil­liams said that low un­em­ploy­ment also made him be­lieve in­fla­tion was likely to move back to the Fed’s tar­get.

Coun­ters were mostly pos­i­tive. Prop­erty surged 1.43% or 55.14 points to 3,912.10; in­dus­tri­als climbed 0.80% or 88.58 points to 11,056.06; hold­ing firms went up 0.59% or 50.80 points to 8,637.95; and min­ing and oil gained 0.41% or 57.01 points to 13,790.65.

Mean­while, ser­vices de­clined 0.98% or 17 points to 1,712.76 and fi­nan­cials dropped 0.10% or 2.05 points to 2,025.62.

De­spite the PSEi’s new high, mar­ket breadth was still neg­a­tive as de­clin­ers trumped ad­vancers at 122 to 82, while 48 is­sues re­mained un­changed.

Value turnover de­clined Thurs­day to P8.21 bil­lion from P11.63 bil­lion as 3 bil­lion shares changed hands.

For­eign­ers turned buy­ers with net pur­chases worth P247.24 mil­lion, re­vers­ing Wed­nes­day’s net sell­ing worth P1.3 bil­lion. •

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