PHL shares rally, peso weakens on Fed rate hike

The local stock market rallied on Thursday while the Philippine peso took a beating after the US Federal Reserve raised interest rates by 75 basis points to help tame inflation in the world's largest economy.

The bellwether Philippine Stock Exchange Index (PSEi) gained 142.50 points or 2.29% to 6,379.26 at the closing bell.

The broader All Shares increased by 54.38 points or 1.61% to close at 3,424.96.

Philstocks Financial senior equity analyst Japhet Tantiangco said the share prices rally “came as the Federal Reserve raised their policy rates by 75 basis points, falling within investors’ expectations.”

The peso, however, weakened against the dollar as higher interest rates in the US increased the allure of the greenback against other currencies.

“The peso [was] weaker versus the US dollar today, but still considered a healthy correction, as the peso is still among the strongest in three weeks, by 0.14 or 0.2% to close at P55.82:$1, after the widely expected +0.75 Fed rate hike,” Rizal Commercial Banking Corp. chief economist Michael Ricafort said.

Ricafort said the market sentiment supports the gains in the local stock market.

Tantiangco said trading remained tepid with net value turnover of P4.42 billion, which was below the year-to-date average of P6.33 billion.

Foreigners were net sellers, with net outflows amounting to P166.42 million. —VBL, GMA News