Stocks rose for a fifth day, following overnight gains on Wall Street as traders welcomed indications from the Federal Reserve that interest rates could rise next month, while oil prices rallied ahead of an expected extension to output cuts.
The Philippine Stock Exchange index, the 30-company benchmark, climbed 33 points, or 0.4 percent, to close at 7,871.65 Thursday, as two of the six sectoral indices advanced.
The heavier index, representing all shares, also gained 21 points, or 0.5 percent, to settle at 4,693.39, on a value turnover of P6.5 billion. Advancers led gainers, 103 to 84, while 53 issues were unchanged.
Nine of the 20 most active stocks ended in the green, led by online gaming company PhilWeb Corp. which surged 14.8 percent to P10 and PLDT Inc. which climbed 6.4 percent to P1,718. Bloomberry Resorts Corp. added 5.7 percent to close at P10.08.
Meanwhile, most Asian markets also traded higher Thursday. Minutes from the Fed’s May policy meeting showed board members thought that if jobs growth in the US remains healthy with a rebound in investment and consumer spending then rates could rise “soon”, which many took to mean June.
While the economy has shown some signs of weakness, the bank still thinks its broad strength would justify winding down its balance sheet, essentially sucking cash out of the system and putting upward pressure on borrowing costs.
The news helped propel Wall Street to a fifth-straight day of gains, with the S&P 500 hitting another record, as the sharp losses suffered last week were reversed.
Global markets tumbled in the middle of last week on fears that crises engulfing Donald Trump could hit his economy-boosting agenda.
On Thursday the Nikkei in Tokyo ended the morning session 0.5 percent higher, while Sydney put on 0.4 percent.
Shanghai jumped 1.4 percent as dealers brushed off a cut in China’s debt rating Wednesday by Moody’s, with speculation state-backed funds were supporting the market.
Hong Kong added 0.8 percent to put it on course for a fourth-straight gain, with the city’s finance minister hitting out at Moody’s decision to also downgrade the city, citing increasingly closer economic links with the mainland.
Seoul jumped 1.1 percent to a fresh record after the South Korean central bank kept interest rates on hold citing an improving economy. Singapore, Taipei and Wellington also posted healthy gains.
Traders are now looking ahead to a meeting Thursday of the OPEC oil cartel at which it, along with key producer Russia, is expected to announce an extension of up to nine months — possibly 12 — to an output cut.
The agreement—which came into force on January 1—sent prices surging when it was unveiled in November in a bid to address a global supply glut.
“The market is waiting for the outcome of the meeting; it’s clearly going to have an impact,” Michael McCarthy, a chief market strategist at CMC Markets in Sydney, told Bloomberg News. “The agreement has been remarkable with the discipline showed by participants so far. In that respect, it’s been a success.”
Crude prices, which dipped slightly Wednesday on profit-taking despite a drop in US inventories, were comfortably higher in Asia. With Bloomberg, AFP