Stocks soared to a new all-time high before paring their gains Thursday, after the Federal Reserve unveiled plans to wind down its crisis-era stimulus and hinted at another interest rate hike before the end of the year.
The Philippine Stock Exchange index, the 30-company benchmark, climbed 67 points, or 0.8 percent, to close at 8,286.86, as all six major sectors advanced. The bellwether soared to a new peak of 8,321.81 in the afternoon, before profit-taking trimmed its gains.
The heavier index, representing all shares, also rose 30 points, or 0.6 percent, to settle at 4,885.00, on a value turnover of nearly P8 billion. Gainers outnumbered losers, 107 to 95, while 54 issues were unchanged.
Fourteen of the 20 most active stocks ended in the green, led by hotel operator Waterfront Philippines Inc. which jumped 11.1 percent to P1.40 and aviation company MacroAsia Corp. which climbed 10.1 percent to P15.50. Conglomerate Alliance Global Group Inc. of tycoon Andrew Tan went up 7.6 percent to P16.90.
Meanwhile, Asian markets were mixed, after US Federal Reserve Chair Janet Yellen said the world’s biggest economy was “performing well” while it emerged after a closely watched meeting that most members of the policy board wanted to lift borrowing costs by December.
The central bank also announced it would next month begin cutting back on its holdings of bonds and other assets built up as part of a scheme to keep rates low and steer the economy through the global financial crisis a decade ago.
Yellen said policymakers would react accordingly to any negative impacts on the economy, adding that persistently low inflation would likely come to an end.
She also said if prices rose too quickly the bank would be able to lift rates quicker.
“It doesn’t get any more brazenly hawkish from Dr. Yellen, who along with the majority of her colleagues is clearly in the December rate hike camp and the markets are reacting to this news,” said Stephen Innes, head of Asia-Pacific trading at Oanda.
The dollar surged in New York to 112.15 yen from 111.50 yen earlier in Asia. On Thursday, the US unit was given an extra lift after the Bank of Japan decided against altering its ultra-loose monetary policy, which analysts said could see it break above 113 yen soon.
The euro sank from around $1.20 to below $1.19 while the pound dropped below $1.35 in New York but the pair recovered some ground in Asia Thursday.
The greenback continued to advance against other higher-yielding currencies with the Australian and Canadian dollars, South Korean won and Indonesia’s rupiah all well down.
The dollar’s gains come after a run of losses in recent months as tepid inflation and a lack of movement on Donald Trump’s economic agenda in Congress had seen investors bet on no more rate hikes this year.
The jump in the dollar against the yen boosted Japanese exporters, which helped the Nikkei index close 0.1 percent higher.
Toshiba retreated as its US partner Western Digital vowed to block an $18-billion deal that will see the Japanese firm sell its key chip business to a consortium led by US investor Bain Capital and including Apple and Dell.
The deal, announced by Toshiba on Wednesday, is seen as crucial to the Japanese firm’s survival.
However, most other regional markets retreated. Hong Kong, where monetary policy is linked to that of the United States, slipped 0.1 percent while Sydney shed 0.9 percent on falling iron ore prices.
Shanghai was off 0.2 percent, Singapore eased 0.1 percent and Seoul retreated 0.2 percent. Wellington slipped 0.3 percent but Taipei was up 0.6 percent. With AFP, Bloomberg