Stocks end in green on bargain hunting

MANILA, Philippines — Local stocks ended a roller-coaster week in the green yesterday, bucking a general downturn in Asia, as investors scouted for bargains amid a still cautious sentiment over an impending interest rate hike by the Bangko Sentral ng Pilipinas (BSP) next week.

The benchmark Philippine Stock Exchange index (PSEi) finished at 6,876.79, up 34 points or 0.50 percent, while the broader All Shares index rose to 3,653.17, up 9.67 points or 0.27 percent.

Traders also noted the rebalancing in the MSCI index to be implemented on Feb. 28 also led to a portfolio realignment by investors.

Market sentiment is still supported by a less hawkish US Federal Reserve stance, they added.

Meanwhile, Asian shares were mostly lower yesterday after Wall Street retreated for a second day as market watchers considered earnings reports and various indicators about whether inflation is waning in the US and elsewhere.

Investor focus is now trained on crucial US consumer price data due Tuesday.

Traders also fretted about the potential for further Federal Reserve tightening and the effect on the economy.

At the start of this week, investors had been cheered after Fed Chair Jerome Powell refrained from striking a more hawkish posture following after a much stronger than expected jobs report at the end of last week.

“Powell maintained a relatively dovish tone, and markets took that as a green light to rally, but pretty much 24 hours later we got a stream of extremely hawkish Fed speak,” said Tony Sycamore, a strategist at IG.

“If rates go past that five, five-and-a-quarter percent range that the Fed has previously indicated, markets are definitely not priced for that - absolutely not.”

Next week will bring the release of US and British inflation updates, as well as US retail sales and industrial production data. On Tuesday, Japan will report its economic growth figures for the final quarter of 2022.

High inflation and worries about a slowing economy have already begun to hit corporate earnings, and big US companies have been reporting relatively lackluster results for the end of 2022.