Stocks rally on Fed hint of US recovery

The stock market continued to exceed the 7,000 level yesterday, boosted by strong confidence on the resurgence of the US economy under a Donald Trump presidency as shown by the minutes from the Federal Reserve’s December meeting.

The benchmark Philippine Stock Exchange index (PSEi) rallied 178.49 points or 2.53 percent, closing at 7,209.44 yesterday. The broader All Shares index also moved up by 88.99 points to 4,336.77.

All counters recorded positive growth, led by the mining and oil sector which ended at 12,387.81, and the industrial counter, which closed at 11,047.85.

Total value turnover reached P10.28 billion. Advancers were more than double as compared to decliners at 146 to 55, while 32 issues were unchanged.

According to Regina Capital managing director Luis Limlingan, investors were encouraged by minutes from meeting of the Federal Open Market Committee (FOMC).

“Officials voted unanimously to lift the benchmark (interest rates) but aside from that, the discussion was about the potential economic impact from Mr. Trump’s election victory, which they think would be robust,” Limlingan said in a phone interview.

“In fact, several of the participants pointed out that depending on the mix of taxes, spending, regulatory and possible policy changes, economic growth might turn out to be much more faster than anticipated,” he said.

However, he said the policymakers noted that there might be upside risks as a result of the prospects of Trump’s expansionary fiscal policies.