Easing Fed rate fears lift stocks, peso

The Philippine stock market and the peso gained ground on Thursday after weaker-than-expected US producer inflation eased concerns over another interest rate hike by the US Federal Reserve later this month.

The US Producer Price Index (PPI) fell by 0.3 percent in June, bringing the annual rate to 5.5 percent from 6.5 percent in May. The slowdown fueled expectations that the Federal Reserve may take a less aggressive stance on monetary policy.

The Philippine Stock Exchange index (PSEi) rose 0.36 percent to 6,325.15, while the broader All Shares Index gained 0.45 percent to 3,413.71.

Mining and Oil led sectoral gainers with a 2.90-percent increase. Holding Firms advanced 0.95 percent, Financials added 0.88 percent, and Property climbed 0.74 percent.

Services slipped 0.23 percent, while Industrial edged down 0.006 percent. Market breadth remained positive, with 117 gainers, 78 losers, and 57 unchanged issues.

Trading remained relatively light as 794.6 million shares worth ₱7.42 billion changed hands during the session.

Philstocks Research said the local market extended its rally as investors welcomed easing concerns over the Federal Reserve’s policy outlook. It noted that the decline in the US June PPI strengthened hopes that interest rates may remain steady at the Fed’s July 29 meeting.

The peso also appreciated against the US dollar, closing at ₱61.62 from ₱61.68 a day earlier. It traded between ₱61.60 and ₱61.70 before averaging ₱61.64.

Dollar trading volume reached US$1.29 billion, higher than the previous session’s nearly US$1.15 billion, reflecting improved activity in the foreign exchange market.