SHARES climbed on Thursday on bargain hunting and as Wall Street cheered the US Federal Reserve’s decision to hike interest rates by 75 basis points (bps), bigger than increases made at previous meetings, to fight rising inflation.
The benchmark Philippine Stock Exchange index (PSEi) rose by 73.59 points or 1.16% to close at 6,393.01 on Thursday, while the broader all shares index ended higher by 25.54 points or 0.74% to 3,435.24.
“Philippine shares rebounded following the Federal Open Market Committee’s rate hike announcement. The Fed announced a 75-bp rate hike to conclude its two-day policy-setting meeting, which had been widely anticipated by the market, but it was Fed Chair Jerome Powell’s willingness to do another hike of that size to tamp down inflation back to its 2% objective that surprised markets,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
“The local market bounced back this Thursday as investors hunted for bargains from the preceding day’s losses… The positive spillovers from Wall Street’s overnight performance also helped in the rebound. This is as Federal Reserve Chairman Jerome Powell said that it is still possible for the US economy to avoid a recession amid their monetary tightening,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.
The Fed on Wednesday approved its largest interest rate increase in more than a quarter of a century to stem a surge in inflation, Reuters reported.
Officials also envision steady rate increases through the rest of this year, perhaps including additional 75-bp hikes.
Wall Street rallied on Wednesday after the Fed’s announcement. The Dow Jones Industrial Average rose 303.70 points or 1% to 30,668.53; the S&P 500 gained 54.51 points or 1.46% to 3,789.99; and the Nasdaq Composite added 270.81 points or 2.50% to end at 11,099.16.
Back home, Regina Capital’s Mr. Limlingan said the April remittances…
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