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Friday, March 29, 2024

Market rebounds; SSI, Metro climb

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Stocks rebounded Tuesday, ahead of US Federal Reserve Chair Janet Yellen’s speech that is expected to provide clues on the outlook for interest rates and the American economy. 

The Philippine Stock Exchange index, the 30-company benchmark, climbed 62 points, or 0.8 percent, to close at 7,876.37, as five of the six major sectors advanced.

The heavier index, representing all shares, also gained 25 points, or 0.5 percent, to settle at 4,704.47, on a value turnover of P9.2 billion.  Losers outnumbered gainers, 103 to 94, while 50 issues were unchanged.

Fifteen of the 20 most active stocks ended in the green, led by retailers SSI Group Inc. which surged 8.1 percent to P3.89 and Metro Retail Stores Group Inc. which climbed 5.9 percent to P4.87.  Port operator International Container Terminal Services Inc. rose 4.5 percent to P102.70.

Meanwhile, the dollar swung in Asian trade after a top Federal Reserve official indicated it would hike interest rates further this year, while traders await a speech from their boss Janet Yellen.

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The greenback surged to a one-month high in the morning, providing buying momentum for Japanese stocks, but gave up the gains as the day wore on.

Business was also subdued by concerns about the future of Donald Trump’s economic agenda as he struggles to push through a controversial health bill.

Expectations for another lift in US borrowing costs were fanned after the head of the New York Fed, Bill Dudley, suggested policymakers could widen their parameters when deciding the course for monetary policy.

And San Francisco Fed president John Williams warned the world’s top economy could overheat if rates were not lifted at the right time.

They follow Yellen’s increasingly hawkish tone and the bank’s plan to wind down its bond-buying program to suck excess cash out of financial markets.

Greg McKenna, chief market strategist at AxiTrader, said in a note that “Dudley expanded the Fed’s mandate in a way that suggests he sees the Fed with a broader remit than just inflation and unemployment”.

Yellen is due to speak in London later Tuesday before heading to a central bankers conference in Portugal, with her remarks pored over for clues about the Fed’s plans.

The dollar jumped to 112.08 yen at one point Tuesday—its highest level since mid-May—but soon retreated below its late New York levels. However it is still above the 111.31 yen in Tokyo earlier Monday.

Japanese equities rose with the Nikkei ending 0.4 percent higher.

Toshiba fell 1.7 percent after a report in the respected Nikkei business daily said the form was set to sign a deal offloading its prized memory chip business to a consortium of US, South Korean and state-backed Japanese investors.

The conglomerate is desperately trying to raise money after suffering massive losses in its US nuclear operations that have raised doubts about its future.

Among other markets, Hong Kong was down 0.1 percent in the afternoon, Shanghai closed 0.2 percent up and Sydney fell 0.1 percent.

Singapore put on 0.4 percent and Seoul was 0.1 percent higher and Wellington edged up. With AFP, Bloomberg

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