Stocks, peso strengthen as US Fed holds rates steady

MANILA, Philippines, October 30 ------ Philippine financial markets found some relief yesterday after the US Federal Reserve kept interest rates unchanged, lifting local shares as bargain hunters stepped in while the peso strengthened back to the 63-per-dollar level.

The benchmark Philippine Stock Exchange index (PSEi) climbed by 0.92 percent, or 52.03 points, to close at 5,705.58 as investors took gains from the Fed’s decision to hold rates for now. The broader All Shares index also rose by 0.38 percent, or 12.04 points, to settle at 3,194.73.

Regina Capital Development Corp. head of sales Luis Limlingan said investors have also drawn confidence from the peso’s slight recovery. However, he sees no sustained rebound for the PSEi, as investors are likely to remain cautious amid economic risks. “The Fed’s decision to keep interest rates unchanged offered short-term relief to local equities by easing some concerns over further monetary tightening. However, persistent domestic inflation and currency pressures continue to pose risks to the market outlook,” Limlingan said. He also warned that a deterioration in economic indicators could trigger another round of selling, as investors weigh the potential impact on capital flows and corporate earnings.

The PSEi handled P3.97 billion in transactions yesterday, with winners outperforming losers, 86 to 77, while 85 issuers were unchanged. Logistics giant International Container Terminal Services Inc. was the most actively traded stock yesterday, gaining 2.44 percent, climbing to P840 a piece. Meanwhile, data from the Bankers Association of the Philippines showed the peso closed at 63.85 per dollar, stronger by 17.5 centavos than Wednesday’s 64.025 close.

The peso opened at 63.88 and strengthened to as much as 63.80, its best level for the day. It briefly weakened to 63.91 before settling at 63.85. Trading volume fell by about 11.9 percent to $1.46 billion from $1.66 billion in the previous session.

Source: philstar.com