The stock market surged Thursday after the Federal Reserve finally lifted interest rates for the first time in almost a decade.
The Philippine Stock Exchange Index advanced 97.98 points, or 1.4 percent, to 6,905.70 on a value turnover of P6.4 billion. Gainers beat losers, 101 to 60, with 47 issues unchanged.
BDO Unibank Inc., the biggest lender in terms of assets, climbed 4.5 percent to P104.50, while chemical company D&L Industries surged 5.6 percent to P9.40.
Jollibee Foods Corp., the largest fast-food chain, rose 3 percent to P211.20, while DMCI Holdings Inc., which has investments in coal mining, power generation, water distribution and property development, rallied 3.9 percent to P13.48.
Asian traders, meanwhile, tracked global gains. Tokyo ended 1.6 percent higher, Shanghai put on 1.8 percent and Sydney climbed 1.5 percent. Hong Kong added 0.8 percent in the afternoon.
“What is clear is that equity markets are taking the rate hike as a positive,” said IG Markets analyst Angus Nicholson.
“The fact that the Fed were able to hike rates indicates that the US economy has finally developed enough upward momentum,” he added.
The widely expected US Fed rate increase was met with a surge in shares in New York and Europe as well as Latin America as the US central bank reiterated its view that the world’s number-one economy is in rude health.
It also brings to an end months of speculation and uncertainty that had rattled world markets and fueled concerns that the economy’s recovery was not as strong as thought.
“There’s a sense of relief that they finally raised rates,” said Chris Green, a strategist at brokerage and wealth management firm First NZ Capital Group in Auckland.
“This is a net positive in terms of market sentiment. It’s removed the point of lift-off from the discussion, we’re over that hurdle. Now the question is: how gradual is that normalization profile and where do the risks lie,” he told Bloomberg News.
Fed chair Janet Yellen said the decision “recognizes the considerable progress that has been made toward restoring jobs, raising incomes and easing the economic hardship of millions of Americans.”
Rates were cut to near-zero in 2008 by the Fed as part of a drive to fend off the ravages of the global financial crisis as it tore into the US economy, scything jobs and sending world stocks into free fall.
The bank now sees US growth picking up pace to 2.4 percent next year despite a slowdown in most other world economies, particularly China, and also stressed future rate hikes would be “gradual”, forecasting 100 basis points throughout 2016.
Yellen said the move represents a US economy that “is a source of strength to the emerging markets and other economies around the globe.”
However, she added that there was still room for improvement in the jobs market while inflation was still below target.
The rally comes after a torrid month that saw equities battered—including nine straight losses in Hong Kong—by concerns about the global outlook and plunging oil prices that skittled energy firms. Despite the upbeat sentiment, oil prices remain bolted to seven-year lows. With AFP