Stocks inch up on last-minute buying, Fed meet

 Stocks inch up on last-minute buying, Fed meet

STOCKS inched up on Wednesday on last-minute buying ahead of the US Federal Reserve’s policy decision.

The benchmark Philippine Stock Exchange index (PSEi) went up by 6.53 points or 0.09% to close at 7,026.45 on Wednesday, while the broader all shares climbed by 19.61 points or 0.53% to 3,713.68.

“Last-minute buying sent the local market higher this Wednesday. For the most part of the day however, the market was in the negative territory as investors brace for the Federal Reserve’s upcoming policy decision wherein a rate hike is already possible,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

The Federal Reserve on Wednesday was expected to close the door on its ultra-easy pandemic-era monetary policy and step up the fight against stubbornly high inflation with the first in what is likely to be a series of interest rate hikes this year, Reuters reported.

The shift, beginning with an expected quarter-percentage-point increase in the US central bank’s benchmark overnight interest rate, has been in the works since last fall and has already driven up the cost of home mortgages and other key types of credit in anticipation of what the Fed will do to curb prices that are rising at their fastest pace in 40 years.

Yet the urgency surrounding the Fed’s policy meeting this week has intensified because inflation has shown no signs of easing and may even rise further on the back of Russia’s invasion of Ukraine, which fueled an oil price spike this month.

“Philippine shares staged a rally to close slightly higher on the back of declining oil prices and a lighter than expected February US producer price index (PPI) reading at 0.8%,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

US producer prices increased in February as the cost of goods like gasoline surged, and further gains are in the pipeline following Russia’s invasion of Ukraine, which has made crude oil and other commodities more expensive.

Majority of the sectoral indices ended in the green except for property, which fell by 31.93 points or 0.95% to 3,325.52, and financials, which dropped by 6.75 points or 0.41% to 1,622.85.

Meanwhile, mining and oil surged by 260.91 points or 2.20% to 12,073.80; industrials rose by 164.43 points or 1.74% to 9,597.93; services gained by 10.04 points or 0.55% to 1,835.45; and holding firms increased by 5.76 points or 0.08% to 6,766.29.

Value turnover decreased to P7.76 billion with 1.32 billion shares changing hands from P9.61 billion or 3.61 billion issues seen the previous day.

Advancers outnumbered decliners, 119 versus 59, while 55 names closed unchanged.

Foreigners turned buyers with P23.87 million in net purchases on Wednesday from P660.90 million in net sales seen on Tuesday. — L.M.J.C. Jocson with Reuters