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PHILIPPINE STOCKS prolonged their winning sequence on Thursday, with investors wagering that the Bangko Sentral ng Pilipinas (BSP) may soon replicate the US Federal Reserve’s decision to relax monetary policy, enhancing the appeal for risk assets.
The benchmark Philippine Stock Exchange index (PSEi) increased by 0.37% or 22.96 points to close at 6,233.62, whereas the broader all-share index grew by 0.15% or 5.84 points to 3,734.45. This marked the PSEi’s third consecutive day of increases.
“The market responded favorably to the Fed’s rate reduction, as this action could trigger a similar response from the BSP,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., stated in a Viber message. “An anticipated rate reduction by the BSP could enhance market sentiment, supporting the recent rise in prices.”
He further mentioned that investors foresee a more relaxed monetary policy to stimulate economic activities and asset valuations.
On Wednesday, the US Federal Reserve slashed its benchmark rate by 25 basis points, marking its first decrease in nearly a year, while indicating that two additional cuts could be expected before the year concludes.
Fed Chairman Jerome H. Powell pointed out the softness in the US labor market even as inflation exhibited signs of tapering.
While Wall Street’s response was varied — the Dow Jones Industrial Average closed higher, whereas the S&P 500 and Nasdaq declined — Philippine investors interpreted the Fed’s action as a signal for local easing.
Finance Secretary Ralph G. Recto previously stated that the BSP might consider one or two 25-basis-point reductions in its policy sessions on Oct. 9 and Dec. 11, contingent on US and domestic inflation developments.
Sectoral performance was diverse. Financials advanced 1.04% to 2,123.69, holding firms rose 1.08% to 5,127.32, and services increased 0.35% to 2,256.7. Conversely, mining and oil fell 2.49% to 11,678.28, industrials dipped 0.62% to 8,987.12, and property decreased 0.56% to 2,454.96.
Market breadth was nearly unchanged, with 89 gainers outpacing 88 decliners, while 66 stocks remained the same. Net foreign selling amounted to P55.05 million.
Value turnover shrank to P6.87 billion from P10.02 billion the prior day. A total of 2.09 billion shares exchanged hands, significantly down from Wednesday’s 7.48 billion. — Alexandria Grace C. Magno
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