Stocks inch higher on bets of aggressive Fed hike
STOCKS eked out gains on Tuesday after President Ferdinand “Bongbong” R. Marcos, Jr.’s first State of the Nation Address and expectations of another aggressive rate hike by the US Federal Reserve.
The Philippine Stock Exchange index (PSEi) went up by 13.47 points or 0.21% to close at 6,223 on Tuesday, while the broader all shares index increased by 5.22 points or 0.15% to 3,364.99.
“Shares on the Philippine Stock Exchange traded in a narrow range after President Ferdinand Marcos, Jr.’s State of the Nation Address and ahead of what is likely to be another sharp US interest rate hike,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.
Mr. Arce said that the President’s pledge to pursue “prudent” fiscal management and tax reforms gave local equities a boost.
“The Philippine stock exchange finished marginally higher with very light volume on Tuesday, as investors braced for the Fed’s crucial policy decision later this week and as they awaited more corporate earnings reports,” Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood said in a Viber message.
Mr. Lood said “statements by Fed Chairman Jerome H. Powell after the announcements will be vital, as some investors fear that aggressive rate increases will push the US and global economies into recession.”
The Fed is holding its policy review on July 26-27. Markets are pricing in at least another 75-basis-point hike as inflation in the world’s largest economy continues to soar.
Investors also want to see if emerging risks to the economic outlook would cause the Fed to signal less aggressive rate increases in its coming meetings.
Back home, the majority of sectoral indices ended in the green on Tuesday except for property, which went down by 25.19 points or 0.89% to 2,795.87, and financials, which decreased by 0.04 point to 1,460.49.
Meanwhile, holding firms increased by 41.78 points or 0.71% to 5,912.45; services went up by 11.15 points or 0.69% to 1,626.77; industrials gained by 42.06 points or 0.45% to 9,358.98; and mining and oil inched up by 26.57 points or 0.23% to end Tuesday’s session at 11,281.96.
Advancers outnumbered decliners, 104 versus 74, while 47 names closed unchanged.
Value turnover declined further to P3.75 billion on Tuesday with 728.03 million shares changing hands from the P4.3 billion with 517.72 million issues seen the previous day.
Net foreign selling went down to P431.57 million from the P690.95 million seen on Monday.
Globalinks Securities’ Mr. Arce placed PSEi’s support from 6,150-6,000 and resistance between 6,450 and 6,500, while Timson Securities’ Mr. Lood put support at 5,900 and resistance at the 6,700 area. — Justine Irish D. Tabile
