Asian markets up on Wall Street gains

Most Asian markets rose yesterday, tracking a rebound in Europe and New York and following positive remarks from a senior Federal Reserve official that US inflation was headed in the right direction.

The Philippine Stock Exchange index (PSEi) went up by 0.4 percent or 27.62 points to finish at 6,882.15, on total trades worth P4.9 billion.

The local market was also buoyed by reports of record high dollar remittances last year as well as the expected policy standstill by the Bangko Sentral ng Pilipinas.

Asian investors returned to buying on expectations borrowing costs will be reduced this year, while traders also cheered strong earnings releases that soothed any worries about companies’ bottom lines.

“Over time we think it will become clear that January was more one-off versus a new CPI trend,” 22V Research strategists led by Dennis DeBusschere said.

Traders will be closely following the release of the producer price index, which is due at the end of the week.

Stephen Innes, of SPI Asset Management, added that the US stock market’s rebound “offers some respite following the bolt from the blue delivered by inflation figures” on Tuesday.

“Notwithstanding inflation, which is still too high versus arbitrarily defined targets, the US macro picture continues evolving consistently with a soft landing,” he added.

The Fed’s vice chair for supervision, Michael Barr, said the central bank should be “careful” about the timing of interest rate cuts but added that he was “confident” inflation was heading back to the target of two percent.

“We need to see continued good data before we can begin the process of reducing the federal funds rate,” Barr said.