Philippine shares continued their ascent on Thursday after Wall Street rallied hard as the US Federal Reserve delivered an expected half a percent interest rate hike to cool surging consumer prices.
Back home, the Philippine government announced April headline inflation rising to 4.9 percent, near the top end of recent forecasts.
The announcements turned out to be a “buy the news” event, with the benchmark Philippine Stock Exchange Index (PSEi) gaining 0.97 percent, or 66.19 points, to 6,868.92 while the broader all-shares index rose 1.33 percent, or 48.17 points, to 3,663.16.
“Local and regional equities went on a relief rally as the Fed announced a widely anticipated 50 [basis point] rate hike during its policy setting meeting yesterday,” Luis Gerardo Limlingan, managing director at Regina Capital Development, said in a note to investors on Thursday.
Some of the top index movers were SM Investments Corp., Converge ICT Solutions Inc. and Globe Telecom.
BDO Unibank Inc. chief strategist Jonathan Ravelas, who was targeting a higher than average local inflation print of 4.7 percent last month, said the April reading was the fastest increase since December 2018.
He also warned that elevated consumer prices would put downward pressure on equities in the coming weeks.
“The Fed hiked rates by 50 bps as expected and signaled a lot more tightening to come,” he said in a tweet on Thursday.
“A series of further same-sized steps are on the table, Jerome Powell said. With high inflation and rising rates, it makes sense to sell stocks in May and run away,” he added.
Trading volume subsided on Thursday amid the small stock market rally. A total of 1.06 billion shares valued at P5.7 billion changed hands while foreigners were net buyers to the tune of P135.15 million.
A total of 140 companies advanced versus 59 losers while 37 companies closed unchanged.
SM Investments was the top traded firm as it rose 1.41 percent to P861 per share.
It was followed by Converge ICT Solutions Inc., up 6.38 percent to P30; International Container Terminal Services Inc., down 1.86 percent to P211; SM Prime Holdings Inc., up 0.68 percent to P37; and BDO Unibank Inc., up 0.94 percent to P129 per share.
Other heavy movers were Universal Robina Corp., up 0.36 percent to P111.20; Globe Telecom, up 7.47 percent to P2,388; PLDT Inc., up 2.28 percent to P1,932; Bank of the Philippine Islands, down 0.92 percent to P97; and Ayala Land Inc., up 1.72 percent to P32.55 per share.