Market advances as US Fed holds rates

Stocks extended their gains to the sixth day, after US Federal Reserve’s decision to hold off hiking interest rates sent emerging market currencies and most Asian markets advancing Friday.

The Philippine Stock Exchange index, the 30-company benchmark, rose 7 points, or 0.1 percent, to close at 7,131.91 on Friday.  The index was still down 1.4 percent since the start of the year.

The heavier index, representing all shares, gained 14 points, or 0.4 percent, to settle at 4,076.60,  on a value turnover of P10 billion.

Gainers outnumbered losers, 100 to 80, while 33 issues were unchanged.

Electronics manufacturer Ionics Inc. emerged as the biggest gainer among the 20 most active stocks, as it jumped 49.7 percent to P2.32  Technology company IBM earlier teamed up with Ionics to create the IBM IoT (Internet-of-Things) platform.

SM Prime Holdings Inc., the property arm of the Sy family, advanced 6.4 percent to P22.35, while property developer Ayala Land Inc. rose 1.6 percent to P35.05.

Meanwhile, the US central bank’s head Janet Yellen said the ongoing crisis in China and recent turmoil on world markets had played a role in keeping borrowing costs at zero.

The Fed’s decision followed widespread warnings about the dire impact a rate increase could have, with the World Bank predicting this week it would cause a “perfect storm” in financial markets.

It also came despite a string of data in recent months showing the US economy, the world’s biggest is well on track to recovery.

Yellen told a news conference: “A lot of our focus has been on risks around China, but not just China, emerging markets more generally and how they may spill over to the United States. We’ve seen significant outflows of capital from those countries, pressures on their exchange rates and concerns about their performance going forward,” Yellen said of the emerging market economies.

“The question is whether or not there might be a risk of a more abrupt slowdown than most analysts expect,” she said.

The news pushed the dollar lower. It was buying 119.80 yen in Tokyo trade, compared with 120.90 yen in Asia Thursday. The euro was at $1.1403 against $1.1302 a day earlier.

Struggling emerging market currencies, which have been rising this week on hopes the bank would hold fire, were also higher. The South Korea won added 0.27 percent, the Malaysian ringgit gained 0.50 percent, India’s rupee was 0.82 percent higher and the Singapore dollar was up 0.06 percent.

“For emerging-market central bankers, the Fed has given them some much-needed breathing room,” said Jonathan Lewis, a principal at New York-based Samson Capital Advisors LLC. With AFP

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