Fed rates comment cheers PH market

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The local stock market matched the enthusiasm of global markets in reaction to the signal from the US Federal Reserve that it was no longer observing “patience” in its rates guidelines, pushing the benchmark index back above 7,800 points on Thursday.

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The Philippine Stock Exchange index (PSEi) gained 0.75 percent or 57.97 points to close at 7,814.55, while the All Shares index added 0.48 percent or 18.59 points to 4,520.78.

“The local share prices rallied back to the 7,800 mark, boosted by a surge in optimism across global markets,” Justino Calaycay Jr., analyst at Accord Capital Equities Corp., said.

“US stocks rallied over 1.2 percent last night following the Fed’s dropping of the word ‘patience’ in its guidance language for interest rates. Instead, it avowed adjustments will ‘go slow’ in consideration of further improvements in the macroeconomic data and of pushing inflation rates towards the 2 percent target,” he added.

Calaycay noted that the Fed’s removal of the word “patience” in its rates guidance has taken much of the uncertainty off the table, pushing up markets globally.

The US markets were up on the US Federal Reserve’s announcement overnight, with the Dow Jones Industrial Average climbing 227.11 points, the S&P 500 jumping 25.22 points, and tech-heavy Nasdaq increasing 45.39 points.

Among the local sector counters, industrials and mining and oil were the only decliners while the rest advanced, led by a 1.47-percent gain for the services index.

Active issues posting gains on Thursday included Philippine Long Distance Telephone Company, Ayala Land Inc., Alliance Global Group Inc., Ayala Corp., Metropolitan Bank and Trust Company, BDO Unibank Inc., JG Summit Holdings Inc., and Universal Robina Corp., while SM Investments Corp. and Energy Development Corp. both had minor declines.

Advancing issues outnumbered decliners 93 to 88, while 44 were unchanged. Trade volume stood at 1.1 billion shares, valued at P12.21 billion.

On Wednesday, the benchmark stock index dropped 32.52 points or 0.42 percent to finish at 7,756.58, while the wider All Shares index lost 19.90 points or 0.44 percent to 4,502.19.

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