PSEi retests 7,000 ahead of US Fed meeting

LOCAL stocks rallied on Monday, bringing back the main barometer to the 7,000 level, on bets that the US Federal Reserve will defer the interest rate that many investors had assumed to come in this September.

The Philippine Stock Exchange index racked up 157.8 points or 2.28 percent to close at 7,069.18, shrugging off the decline in China and Japan stocks.

Most emerging markets similarly advanced as investors increasingly bet that the US Federal Reserve would not lift interest rates from near-zero level at this week’s meeting. On Friday, the Dow Jones Industrial Index racked up 102.69 points or 0.63 percent.

At the local market, all counters were up but the biggest gainers were the holding firm and property counters which both advanced by over 2.6 percent. Monday also marked the first day of trading after the so-called “ghost month” period.

Value turnover amounted to P5.18 billion. There were 101 advancers that overwhelmed 64 decliners while 37 stocks were unchanged.

The PSE was led higher by SMIC which surged by 6.24 percent alongside ALI – the most actively traded stock – which advanced by 4.81 percent.

Semirara and DMCI rose by over 3 percent as investors anticipated the reopening of the former’s Panian mine in Antique, which was shut down on July 17 following a tragic landslide amid heavy rains.

AC and PLDT were likewise up by over 2 percent while SM Prime, BDO, URC, Globe and Metrobank all gained over 1 percent.

Meralco, ICTSI and FGEN also contributed gains to the index.

Outside of PSEi stocks, Cebu Air (+1.55 percent) and SBS (+0.71 percent) gained in heavy volume. On the other hand, Megawide fell by 0.9 percent in heavy volume.

“Volatility will likely remain high across asset classes as investors await US FOMC (Federal Open Market Committee) decision this week. Low market expectations of a September Fed lift-off has helped risk assets over last few sessions. But, it is unlikely that market positioning will turn significantly bullish ahead of the event,” Citigroup said in a research note on Monday.

Many investors were earlier expecting the US Fed to start its interest rate “normalization” this September but the odds were seen to have come down given the economic woes of China.