Both the Philippine peso and the local stocks climbed Monday buoyed by optimism about continued monetary easing and the sustained growth of the economy.
The Philippine Stock Exchange index traded above the 6,900 level for most of the morning session before closing at 6,889.87, still up by 42.50 points or 0.62 percent from Friday.
The wider all-shares index closed 3,706.45, up by 15.03 points or 0.41 percent.
Meanwhile, the peso bounced back to close at 56.64 against the US dollar Monday, after falling to 57.245 Friday.
“Investors continued to draw optimism from the Bangko Sentral ng Pilipinas’ recent policy rate cut as well as the prospects of further monetary policy easing moving forward,” Philstocks Financial Inc. research head Japhet Tantiangco said.
“The positive spillovers from Wall Street’s performance last Friday driven by growing confidence on the US economy also helped in today’s session,” he said.
The value of stock trading reached P6.93 billion Monday, higher than year-to-date average of P4.93 billion. Foreign investors were net buyers, with net inflows amounting to P1.41 billion.
Indices ended mixed, with property rising by 1.55 percent. Mining and oil rose 1.42 percent while financial climbed 1.41 percent.
Industrial declined by 0.50 percent, while holding firms dipped by 0.15 percent.
First Metro Securities Research said that in the coming days, investors would mostly focus on the US FOMC minutes and several Fed speeches.
“If the bulls continue to dominate, the market may revisit the 7,000 and 7,100 resistance levels. Conversely, if the bears take control, the PSEi may pull back to its immediate support levels around 6,800 and 6,700,” First Metro said.
Meanwhile, Asian equities were mixed Monday following last week’s strong performance, with traders focused on a closely followed meeting of central bank chiefs where the Federal Reserve’s Jerome Powell is due to deliver a key speech.
Investors appear to have gotten over the turmoil that beset trading floors this month as a string of data suggested that worries of a US recession had been overdone.
Powell’s talk at the annual Jackson Hole symposium in Wyoming — which also gathers together financial leaders and policymakers — will be pored over, with hopes that he will flag an interest rate cut when Fed officials meet next month.
“Investors and analysts alike will be paying close attention to any signals from Fed officials about the future direction of US interest rates,” said Luca Santos, currency analyst at ACY Securities.
“There’s growing speculation that… Powell might hint at the possibility of starting rate cuts as early as September. But the size of the cut is still up in the air.
“A modest 25 basis points reduction seems likely, but a larger 50-basis-point cut would need stronger evidence of a weakening US job market.”
All three main indexes on Wall Street rose Friday, leaving them back near the record highs touched before their August 5 rout as investors grow confident the US economy will avoid recession as the Fed cuts rates.
Asian and European markets wavered after a positive start to Monday.
Hong Kong, Shanghai, Singapore, Sydney, Mumbai, Taipei, Manila and Bangkok rose, although Tokyo, Seoul, Jakarta and Wellington dipped.
London, Paris and Frankfurt dipped in the morning.
Bets on a series of Fed rate cuts weighed on the dollar against most of its peers, with the yen among the big gainers as traders assess the chances of another Bank of Japan hike at its next meeting.
Gold held above $2,500 after breaking the barrier for the first time on Friday, fueled by expectations for Fed cuts that will make the precious metal more attractive to investors.
And oil prices were barely moved after last week’s losses, which came on the back of demand worries as China’s economy struggles to recover.
Investors are also keeping tabs on talks to mediate a ceasefire between Israel and Hamas in Gaza amid fears of a wider war in the crude-rich Middle East. With AFP
