Stocks bounce after rate hike, remittance news

The local stock market bounced after the announcement of an expected US rate hike and the growth in remittances.

The main index rose 73.59 points or 1.16 percent to close at 6,393.01 with the Property sector leading the advance although the Services counter lagged behind. Volume declined to 647 million shares worth P5.6 billion as losers still outnumbered gainers at 107 to 103 while 48 remained steady.

“Philippine shares rebounded following FOMC’s (Federal Open Market Committee) rate hike announcement. The Fed announced a 75bp rate hike to conclude its two-day policy-setting meeting, which had been widely anticipated by the market, but it was (Jerome) Powell’s willingness to do another hike of that size to tamp down inflation back to its two percent objective that surprised markets,” said Regina Capital Development Corporation Managing Director Luis Limlingan.

He added that, “back home, cash remittances sent home by OFWs expanded by 3.9 percent year-on-year to $2.395 billion in April, driven by the growth in receipts from land-based and sea-based workers.”

Philstocks Financial Senior Supervisor for Research Japhet Tantiangco said “the local market bounced back as investors hunted for bargains from the preceding day’s losses. The continuous growth in our cash remittances as seen in our April figures gave sentiment a boost.”

He noted that, “the positive spillovers from Wall Street’s overnight performance also helped in the rebound. This is as Federal Reserve Chairman Jerome Powell said that it is still possible for the US economy to avoid a recession amid their monetary tightening.”

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