By Joann Santiago
MANILA, Sept 18 (PNA) — The local bourse on Thursday tracked the rally of Wall Street following the decision of the Federal Open Market Committee (FOMC) to further cut by USD 10 billion the Federal Reserve’s stimulus program.
A trader said investors became more bullish especially after the FOMC announced a plan to end the Fed’s stimulus program by October if labor situation and inflation would be within the Fed’s long-term objective.
Thus, the Philippine Stock Exchange index (PSEi) gained 0.77 percent or 55.45 points to 7,287.29 points.
All the sectoral indices also registered increases led by the industrial with 1.09 percent or 122.77 points to 11,367.49 points.
Trading remained strong after volume reached 1.74 billion amounting to nearly P8 billion.
Advancers led gainers but it almost balanced at 85 to 82 while 56 were unchanged.
On the other hand, the peso shed P0.16 after ending the trade at 44.42 from Wednesday’s 44.26.
This closing level is near the 44.50 end that the local unit registered in May 2, 2014.
A trader said the general strengthening of the peso is expected after the FOMC meeting.
The peso is expected to stay within the 44.30-44.50 in the next few days but the trader said it is not expected to decline so much because the Bangko Sentral ng Pilipinas (BSP) will be there to address extreme volatilities.
For the day, the peso opened at 44.50, way below the 44.13 a day ago.
Its strongest for the day stood at 44.42 while weakest is at 44.58.
This brought the day’s average at 44.51, a drop from the 44.15 Wednesday.
Volume of trade reached USD 939 million, slightly lower than the USD 1.03 billion a day ago.
Earlier in the day, BSP Governor Amando Tetangco Jr. said regional currencies are not expected to post big movements following the FOMC decision since, for one, the cut has been expected.
He noted that the dollar yields did move up last night, but not in a destabilizing manner.”
He said “markets could still view this as supportive of generalized US dollar strength, which could translate to near-term weakness in regional currencies.”
“Nevertheless we will continue to monitor developments closely, and maintain a presence in the market as needed to smoothen excessive exchange rate movements,” he added. (PNA)