Wall Street gains fuel peso, stocks rebound
THE peso and the stock market posted a rebound on Wednesday following a two-day decline as sentiment rose on hopes that the US Federal Reserve (Fed) could cut interest rates more than once this year.
The currency strengthened by 7 centavos to P58.725:$1 while the benchmark Philippine Stock Exchange index climbed 1.43 percent, or 91.07 points, to close at 6,450.03.
The broader All Shares index also rose, by 32.46 points or 0.94 percent, to 3,495.13.
The peso opened at P58.77 to the dollar and ranged from P58.725 to P58.83. Volume dropped to P780 million from Tuesday's P915 million.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso strengthened after the dollar weakened against major global currencies following dovish comments from the Fed.
Fed Chairman Jerome Powell said on Tuesday that the US central bank had made «real progress» against inflation, which he expects to return to target late next year.
This raised hopes that the Fed would soon start easing and by more than the one cut signaled last month.
AdvertisementUS markets hit new record highs, which fed into gains in the region.
Philstocks Financial Inc. research and engagement officer Mikhail Plopenio, meanwhile, said the PSEi rose «as investors hunted for bargains after a two-day decline.»
«Positive cues from Wall Street also fueled this Wednesday's climb with the bourse joining its neighboring peers in the green territory at the session's close,» he added.
«Inflows from foreign funds gave the market a boost as foreigners were net buyers with net inflows amounting to P22.09 million.»
AdvertisementRegina Capital Development Corp. Managing Director Luis Limlingan, for his part, said that «Philippine shares closed in positive territory… after the Federal Reserve announced some progress in reducing inflation but indicated that it is not yet ready to lower interest rates.»
«Investors turned less cautious as the market rose well above the 6,400 market with the local June CPI (consumer price index) coming out on Friday,» he added.
«Oil prices pulled back from a two-month high as traders assessed the risk of war between Israel and Hezbollah, and monitored the potential threat of
