Stocks rebounded Wednesday along with the rest of Asia after Federal Reserve chief Jerome Powell said the bank would hike interest rates gradually to fight inflation, though oil marched towards $120 as the Ukraine conflict continues to roil energy markets.
The Philippine Stock Exchange Index gained 84.07 points, or 1.2 percent, at 7,388.09 on a value turnover of P8.2 billion. Gainers beat losers, 121 to 76, with 41 issues unchanged.
Semirara Mining and Power Corp., the biggest coal miner, surged 7.5 percent to P32.70, while International Container Terminal Services Inc., the biggest port operator and owned by tycoon Enrique Razon Jr., advanced 4.6 percent to P228.
PLDT Inc., the largest telecommunications firm, climbed 4.6 percent to P1,830, while Nickel Asia Corp., the largest nickel miner, rose 4 percent to P8.15.
The rest of Asian stock markets also advanced.
With the Russian invasion of its neighbor hammering all assets across the board as uncertainty reigns supreme, traders were given a much-needed shaft of light on Wednesday when the Fed boss eased concerns over its plans for tightening policy.
Powell told lawmakers he was in favor of a moderate pace of rate increases, with a 25-basis-point lift this month, as he tries to nurture the economic recovery while keeping a lid on prices, which are rising at their fastest pace in 40 years.
He warned that the “near-term effects on the US economy of the invasion of Ukraine, the ongoing war, the sanctions, and of events to come, remain highly uncertain.”
The comments soothed concerns that officials could announce an aggressive 50-basis-point lift. The issue of Fed tightening has cast a pall over markets for months, bringing a near two-year rally to an abrupt end, and that has now been compounded by the Ukraine crisis.
Powell did, however, say the bank would remain “nimble” to events and would act more aggressively if needed down the line.
Meanwhile, St. Louis Fed chief James Bullard said he was for a “rapid withdrawal of policy accommodation,” as Chicago president Charles Evans added that policy was currently “wrong-footed” and should be tightened.
Still, Powell’s comments were able to “appease risk-markets by ruling out a 50 basis-points hike in March, while simultaneously promising inflation vigilance at following meetings,” said Citigroup strategists William O’Donnell and Edward Acton.
Wall Street ended sharply higher with all three main indexes more than one percent up.
And Asia followed suit with Tokyo, Hong Kong, Sydney, Seoul, Taipei and Singapore leading healthy gains, though Shanghai and Mumbai edged slightly lower.
The gains were also helped by news that Ukraine and Russian officials will hold second round talks to end the war.
But analysts warned of further volatility for some time as fighting continues to rage in Ukraine.
Widespread sanctions across the world against Russia threaten to put its economy on its knees, while Moody’s and Fitch have slashed its rating to junk. With AFP
