Hopes for further reduction in the Bangko Sentral ng Pilipinas’ (BSP) key rates partly boosted the Philippine Stock Exchange index (PSEi), while the peso stood its ground against the US dollar on Wednesday.
The local bourse’s main index rose 1.01 percent to 6,210.66 points, and the All Shares by 0.60 percent to 3,728.61 points.
All the sectoral gauges tracked the main index, led by the Services, which rose 1.90 percent.
Mining and Oil followed with a jump of 1.47 percent, along with the Financials, 1.02 percent; Holding Firms, 0.88 percent; Property, 0.26 percent; and Industrial, 0.16 percent.
Volume reached nearly 7.5 billion shares, amounting to P10.01 billion.
Advancers led decliners at 104 to 83, while 59 shares were unchanged.
Luis Limlinan, Regina Capital Development Corporation head of sales, in a commentary, said the “market looks already positioning ahead of the (US) Fed’s (Federal Reserve) decision, with sentiment also shaped by Finance Secretary (Ralph) Recto’s recent remarks suggesting the BSP may cut rates if the Fed does.”
“With inflation still within the target range, a Fed cut could be a key trigger for the BSP to ease further later this year,” he said.
The Fed’s policy-making Federal Open Market Committee (FOMC) is expected to announce a cut after its two-day meeting ending Sept. 17.
The rate of price increases averaged at 1.7 percent in the first eight months this year, within the central bank’s 2 to 3 percent target band for this year.
This, even as inflation posted an uptick to 1.5 percent last August from month-ago 0.9 percent, the lowest after the 0.6 percent in October 2019.
The manageable domestic inflation rate gave the central bank leeway to cut rates for a total of 75 basis points as of last August, to 5 percent for the target reverse repurchase rate, the lowest since November 2022.
This development also played in the foreign exchange market during the day, allowing the local currency to end the trade at 56.89 from its 56.91 close a day ago.
It opened the day at 56.8 and traded between 56.75 and 56.94. Average for the day stood at 56.86.
Volume reached USD1.49 billion, lower than day-ago’s USD1.95 billion.*PNA
