PHILIPPINE shares rallied on Thursday to drive the benchmark index to its highest level so far this year after the US Federal Reserve kept its key interest rates unchanged.
Bangko Sentral ng Pilipinas Governor Amando Tetangco Jr. told reporters the Fed downplayed the weakness in US economic data and qualified it as transitory. “For the medium term, this bodes well for the trading partners of the US,” including the Philippines.
The benchmark PSEi rose 0.96 percent or 73.49 points to 7,755.75.
This is the highest for the bellwether in the year-to-date, said Regina Capital Corp. Managing Director Luis Limlingan.
The broader All Shares advanced by 0.72 percent or 32.98 points to 4,636.10.
Limlingan said the market traded at new highs for the year, even though US stocks closed narrowly mixed overnight on Wall Street, “as early losses were pared in the wake of a glass half-full spin from the Federal Reserve.”
On Thursday (PH time), the Federal Reserve kept interest rates steady and downplayed the weak economic performance in the first quarter, a signal it remains on course for gradual rate hikes.
Summit Securities Inc. President Harry Liu said the Philippine market was basically range-trading with a positive outlook by investors who were buying on consolidation as they waited for new developments on the global and domestic fronts.
“There is no one issue that made a dramatic movement, except that the whole market is just moving sideways—same as yesterday. Positive outlook. Peso-dollar steady. The only marking time is we’re waiting for something new,” Liu said.
Nearly all market sectors closed in positive territory led, by a 1.46 percent gain in Services. Property rose by 1.22 percent, Holding Firms advanced by 0.97 percent, Financials were up 0.75 percent and Industrials rose by 0.42 percent.
Only the Mining and Oil index finished in the red after the Caixin China General Services Business Activity Index deteriorated at 51.5 in April from 52.2 in March, the lowest since May 2016, according to Limlingan.
The “lowest manufacturing activity means a lower need for metals in China. In addition, reports have been circulating about an uptick in inventory levels,” Limlingan said.
Bets are on that the non-confirmation of Gina Lopez will spur additional supply in the nickel market, he added.