Markets cheer GDP report

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Stocks ended higher yesterday as investors welcomed the news of the 5.9 percent economic growth in the third quarter.

The Philippine Stock Exchange index recorded an increase of 33.19 points, or by 0.54 percent, reaching a closing value of 6,188.22

The broader all shares index also experienced a positive shift, increasing by 11.87 points or 0.36 percent.

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The peso which slipped marginally earlier in the day, was largely unchanged against the US dollar.

The currency closed stronger at 55.89 to the dollar from 56.045 on Wednesday.

It opened at 55.92 and hit a high of 55.84 and a low of 55.98. Trading turnover amounted to $1.33 billion.

“The stronger-than-expected third quarter gross domestic product number opens the door for additional tightening from the Bangko Sentral ng Pilipinas (BSP),” Nicholas Mapa, a senior economist at ING, said.

Mapa expects the BSP to hike rates at the Nov. 16 meeting before raising rates to 7 percent  in December, and anticipates the central bank will set its 2024 inflation forecast at an average of 4.7 percent  year-on-year.

BSP at its meeting in late October delivered a widely-flagged off-cycle interest rate hike and warned of another in an effort to tame inflation.

“The local market rose… as investors cheered the Philippine economy for the third quarter which expanded by 5.9 percent, higher than last quarter’s 4.3 percent growth. Positive sentiment, already backed by the decline in our inflation last October and the strengthening of our local currency, received a further boost from the latest GDP print,”  said Mikhail Plopenio, Philstocks research and engagement officer.

“As a result, the bourse traded in the green territory for the whole session even breaching the 6,200 level intraday before returning below it. Meanwhile, concerns over the ongoing conflict in the Middle East are keeping many on the sidelines resulting in a weak market participation with a net value turnover of P3.32 billion, lower than the year-to-date average of P4.99 billion. Foreigners were net buyers with net inflows amounting to P171.26 million,” Plopenio added.

Only two sectors were in the green however, led by the property segment with a 1.75 percent increase, followed by holding firms adding 0.76 percent.

The mining and oil sector lost the most, dropping 0.8 percent.

Total value turnover was at P4.63 billion.

Decliners beat advancers 96 to 85, while 46 stocks were unchanged.

Equity markets in South Korea and Singapore led modest gains in emerging Asia on Thursday, with regional currencies mostly unchanged against a steady greenback as strength in US Treasuries signaled expectations around peaking interest rates.

Investors were keeping a keen eye on the downward trend in Treasury yields, with the yield on benchmark 10-year notes reaching 4.4922 percent , down 3.1 basis points (bps). They are down over 40 bps since the Federal Reserve’s Nov. 1 meeting.

The US dollar index was largely flat at 105.510 as of 0628 GMT, but has lost more than 1 percent  since the start of the month.

While Fed Chair Jerome Powell struck a dovish tone at the end of a two-day meeting last week but he did not comment on monetary policy in a speech on Wednesday. Powell is due to speak again on Thursday.  – Angela Celis and Reuters

 

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