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U.S. indicators cheer punters

The Philippine Stock Exchange index leveled off at 6,539.96, rising 16.75 points or 0.26 percent after moving between 6,464.49 and 6,539.96

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Reference shares closed higher once again after the US federal Reserve’s (Fed) Beige Book showed an uptick in growth and inflation in the US economy.

The Fed adopted flexible average inflation targeting and outcome-based forward guidance, which the market views as consistent with expectations of liftoff in early 2024, according to Regina Capital Development Corp. managing director Luis Limlingan.

The Philippine Stock Exchange index leveled off at 6,539.96, rising 16.75 points or 0.26 percent after moving between 6,464.49 and 6,539.96 on 86,442 stocks traded valued at P4.939 billion.

In addition, US import prices increased above expectations, driven by petroleum, industrial supplies and food.

Import prices for capital goods and consumer goods outside autos also rose, while vehicles were flat. Meanwhile, oil prices soared after the International Energy Agency reported US inventory data, boosting optimism about crude demand recovery. Brent crude futures climbed by 4.57 percent to $66.58 per barrel (/bl). The US West Texas Intermediate rose by 4.94 percent to $63.15/bl.

Asia tempers rally

Investors in Asia put the brakes on a recent rally that has some worried valuations running a little too high.

The underwhelming performance followed a tepid lead from Wall Street, where only the Dow managed to eke out a gain despite blowout profits at top banks that gave a healthy start to the much-anticipated earnings season.

Observers added the Chinese central bank’s moves to keep a lid on liquidity in the financial system as it tries to control debt issuance showed Beijing was happy enough with its recovery that it was pulling back on last year’s stimulus measures.

“The expectation in the market is that the central bank will gradually tighten its liquidity as it seeks policy normalisation after the pandemic,” Zhang Gang of Central China Securities said.
After hitting a series of records or multi-year highs in recent months, world markets are struggling to push any higher without any new major catalysts, with the latest round of corporate reporting now the main focus.

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