PSEi up slightly following rate hike

THE stock market bucked a regional decline to end higher on Thursday, gaining 11.65 points for a 6,403.74 close. The broader All Shares followed suit, adding 12.30 points, or 0.36 percent, to end the day at 3,388.60.

Other bourses in region fell as news from the United States indicated that the Federal Reserve (Fed) remained hawkish. The Bangko Sentral ng Pilipinas’ (BSP) policy rate was raised by 75 basis points (bps) on Thursday as monetary authorities followed through on a preemptive announcement that it would match the US central bank’s November 2 rate hike.

“The BSP (raised its key policy rate for the 6th straight time, by 0.75 [percent]) to (now at 5.00 percent total) on Nov. 17, 2022 (effective Nov. 18, 2022), as widely expected and reiterated,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., wrote in a commentary.

“This is the highest in nearly four years or since December 2008 when it was at 5.50 percent,” he added.

Investors expect local rate adjustments to continue matching future Fed rate hikes, especially if inflation remains high. The Fed next meets on Dec. 14, 2022. While a smaller 50-bps adjustment is expected, officials have indicated that they are not done with raising interest rates.

“Market sentiment was uplifted after Standard and Poors affirmed Philippine credit ratings for the 3rd straight year since the pandemic at BBB+ or two notches above the minimum investment grade with a stable outlook, and because the budget deficit-to-GDP ratio as of the third quarter of 2022 improved to 6.5 percent, narrower versus the 6.6 percent figure in the second quarter of 2022,” Ricafort also said.

Philstocks Financial Inc. research associate Claire Alviar, meanwhile, noted that geopolitical tensions had eased following news that Russia was likely not responsible for a deadly missile strike in Poland.

Regina Capital Development Corp. Managing Director Luis Limlingan, for his part, said investors would be waiting for the US’ weekly jobless claims, latest reports on October housing starts and building permits, and manufacturing surveys from the Philadelphia and Kansas City Federal Reserve banks.

Sectoral results were again mixed back home with industrials up the most, by 0.99 percent, and financials posting the biggest loss of 0.22 percent.

A total of 582.72 million shares worth P7.3 billion changed hands.

Advancers again slightly won against decliners, 95 to 83, while 48 securities remained unchanged.