Markets, pesos raised Fed minutes

The stock market and the peso had another good day on Thursday, both closing higher as investors were encouraged by a series of upbeat reports.

The underlying index of the Philippine Stock Exchange (PSEi) rose to 6500 points, adding 20.19 points, or 0.31%, to close at 6530 points. The broader All Shares added 6.28 points, or 0.18%, to close at 3442.04.

Meanwhile, the peso strengthened by 16 centavos to 56.78 pesos.

Analysts say the improvement follows the release of the minutes of the last Federal Reserve meeting, which showed the US central bank is leaning towards a slight rate hike, and news that foreign portfolio investment turned positive in October.

“Foreign funds have also helped profit from overseas operations, registering a net inflow of 5.51 billion pesos,” said Japhet Tantiangko, research manager at Philstocks Financial.

Meanwhile, Regina Capital managing director Louis Limlingan said that “Philippine stocks continued to rise as investors analyzed the minutes of the latest FOMC (Federal Open Market Committee) meetings, which indicated a slowdown in Fed tightening in the coming months.”

“Please note that the markets will be closed on Thursday for the Thanksgiving holiday and will close early on Friday,” he added.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said both the stock market and the peso were up “after the latest Fed minutes showed that [a] a smaller Fed rate hike of +0.50 on December 14, 2022, which led to the depreciation of the US dollar against major world currencies; best net foreign portfolio/hot money data”; confirmation of Minister of Finance Benjamin Diokno by the Nominating Commission; Senate approval of the national budget for 2023; and a further decline in world crude oil prices.

The exchange rate, he added, “remains relatively stable/strong for the ninth consecutive week, below the all-time high/psychological level of 59.00; it is now at 56.78, the highest for the peso in more than two months…”

The currency opened at 56.88 pesos and traded at 56.68 pesos. Total volume for the session was $868.5 million, up from Wednesday’s $687.85 million.

All sectoral indices, except for production and property, meanwhile ended the day in positive territory.

Nearly 664 million shares were sold, worth 5.88 billion pesos.

The advancing ones lost out to the receding ones, 87 to 94, while 49 remained unchanged.