PHILIPPINE SHARES rose further on Tuesday amid expectations of further rate cuts by the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve.
The Philippine Stock Exchange (PSEi) index rose 0.2% or 14.96 points to close at 7,432.21 on Tuesday, while the broader all-share index rose 0.13% or 5.48 points to end at 3,963.50. This was a new 31-month high for the PSEi as this was its best since 7,440.91 in Feb. 22, 2022.
“Investors shrugged off Wall Street’s record performance overnight, driven by optimism about the Fed’s monetary policy,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message. “Positive sentiments about the Bangko Sentral ng Pilipinas’ policy outlook also helped keep the momentum up.”
US stocks closed modestly lower on Monday, Reuters reported. The Dow Jones Industrial Average rose 61.29 points or 0.15% to 42,124.65; the S&P 500 gained 16.02 points or 0.28% to 5,718.57; and the Nasdaq Composite gained 25.95 points or 0.14% to 17,974.27.
Monday’s comments by the last three central bank presidents were the focus as investors searched for clues as to why the central bank began its easing cycle by cutting more than 50 basis points (bp).
Fed officials including Raphael Bostic, Neel Kashkari, and Austan Goolsbee supported the central bank’s last rate cut and expressed support for further rate cuts throughout the year.
Meanwhile, Treasury Secretary Ralph G. Recto, who sits on the central bank’s Monetary Board, said on Tuesday that monetary authorities could lower interest rates and match the size of the US Federal Reserve’s rate cut.
Slower inflation allowed the central bank to cut its benchmark lending rate by 25 bps to 6.25% in August, its first rate cut since November 2020, ahead of major central banks, including the Fed.
BSP Governor Eli M. Remolona, ​​Jr. had earlier signaled that there is room for one rate cut this year. The next BSP meeting is on Oct. 17.
“Local stocks rose on Tuesday, supported by the BSP’s interest rate cut and China’s new stimulus measures,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan added to Viber’s message.
Most industrial indices closed higher on Tuesday. The stock rose 0.95% or 28.22 points to 2,989.96; funds rose 0.43% or 10.30 points to 2,372.48; industrials rose 0.09% or 8.81 points to 9,756.33; and mining and oil rose by 0.05% or 4.91 points to 8,532.13.
Services fell 0.61% or 13.96 points to 2,250.79; and holding firms fell by 0.02% or 1.73 points to 6,295.96.
The stock price improved to P11.79 billion on Tuesday with 1.02 billion shares changing hands from P8.72 billion with 698.15 million shares traded on Monday.
The Advancers slightly outnumbered the rejecters, 102 against 100, while 57 names were closed unchanged.
Total imports rose to P2.99 billion on Tuesday from P1.77 billion on Monday. – RMD Ochave with Reuters