Share prices closed up Wednesday as investors were encouraged by the declining inflation in the US.
The peso also rebounded.
The Philippine Stock Exchange index (PSEi) was up 72.77 points, a 1.14 percent hike. The broader all shares index was up 24.04 points or 0.7 percent to 3,478.52.
Gainers edged losers 103 to 80 with 48 stocks unchanged. Trading turnover reached P11.07 billion.
The peso closed stronger at 54.95 to the dollar, from 55.08 on Tuesday.
The currency opened at 54.90 and hit a high of 54.75 and a low of 54.977. Trading turnover reached $899.7 million.
Southeast Asian currencies rose on Wednesday, with the Philippine peso leading gains, after largely in-line US inflation data reinforced hopes of less aggressive rate hikes, while China retail sales swung back to growth, Reuters reported.
The Philippine peso and the Malaysian ringgit firmed 0.3 percent each, with the latter on track for its fifth straight day of gains, while the Indonesian rupiah was trading marginally higher.
US consumer price inflation cooled slightly in February, largely in line with market expectations. However, sticky rent prices meant inflation remained elevated, posing a dilemma for the Federal Reserve to either push ahead with rate hikes or announce a pause.
Interest rate futures pricing implied an 80 percent chance of a 25-basis point (bp) Fed rate hike, a lot more dovish than a week ago when markets priced a similar chance of a 50-bp hike.
The Philippine peso, which trumped the rupiah to be the best-performing currency among its peers so far this year, was supported by the outlook on rates.
The country’s central bank in February said it could raise interest rates by a quarter of a percentage point one more time this year.
“The Bangko Sentral ng Pilipinas (BSP) will probably be the last central bank to hike as Philippine inflation hit more than 8 percent in January,” said Nicholas Mapa, senior economist, Philippines at ING.
“Several other central banks in the region have managed to pause and with the Fed likely taking on a less aggressive stance, the peso will be the likely beneficiary of widening interest rate differentials,” he added.
Claire Alviar, analyst at Philstocks Financial Inc., said investors were encouraged by the within expectation decline in inflation in the US.
It also helped that the BSP calmed investors by saying that Philippine banks have no exposure to Silicon Valley Bank (SVB), she added.
“The easing of the US February inflation rate may signal that the Federal Reserve will slow down in its monetary tightening. Investors took this as a positive catalyst, especially after the collapse of SVB,” Alviar said.
Most actively traded International Container Terminal Services Inc. was down P2.20 to P197.70. BDO Unibank Inc. was up P4.90 to P124.30. Ayala Land Inc. was up P0.20 to P26.50. SM Prime Holdings Inc. was down P0.35 to P34.50. Wilcon Depot Inc. was down P1.50 to P27.50. Globe Telecom Inc. Inc. was down P19 to P1,758. Bank of the Philippine Islands was up P0.50 to P104.30. SM Investments Corp. was up P14 to P874. Century Pacific Food Inc. was down P0.50 to P24.50. Universal Robina Corp. was up P1.60 to P141.40. – Ruelle Castro
