THE MAIN INDEX rose to the 6,800 level on Monday as the market continued to cheer the Philippine central bank’s first rate cut in almost four years and fears of a recession in the United States eased.
The Philippine Stock Exchange index (PSEi) on Monday rose 0.62% or 42.50 points to close at 6,889.87, while the broader stock index rose 0.4% or 15.03 points to close at 3,706.45.
Monday’s close was the PSEi’s best finish in more than four months, or since closing at 6,960.43 on April 2.
“Investors continued to draw optimism from the recent Bangko Sentral ng Pilipinas (BSP) interest rate cut and the prospect of further monetary policy easing in the future,” Philstocks Financial, Inc. said. Senior Research Analyst Japhet Louis O. Tantiangco in a press release. Viber message.
“The Philippine stock market gained ground, supported by a favorable shift in both monetary policy and macroeconomic prospects. As earnings reporting season comes to a close, investor attention has shifted to broader economic trends, which are currently driving the market’s positive trajectory,” said Jovis L. Vistan, vice president of AB Capital Securities, Inc. in a Viber message.
The Bangko Sentral ng Pilipinas (BSP) on Thursday cut its benchmark interest rate for the first time in almost four years, amid an improving inflation and economic outlook, with the governor announcing at least one more cut before the end of the year.
The BSP cut its target reverse repurchase rate by 25 basis points (bps) to 6.25%.
BSP Governor Eli M. Remolona Jr. said at a briefing that they could cut rates by another 25 basis points within a year.
“The positive spillovers from Wall Street’s performance last Friday, driven by growing confidence in the US economy, also helped [Monday’s] session,” Mr. Tantiangco added.
At home, most sector indices ended higher. Real estate rose by 1.55% or 42.69 points to 2,788.48; mining and oil rose 1.42% or 115.74 points to 8,257.60; financial services rose 1.41% or 28.41 points to 2,040.08; and services rose by 0.58% or 12.59 points to 2,180.62.
On the other hand, industrials fell 0.5% or 46.89 points to 9,271.98; and holdings fell 0.14% or 8.56 points to 5,840.05.
Value turnover rose to P7.64 billion on Monday with 625.66 million shares changing hands, while Friday’s P7.14 billion saw 699.87 million shares traded.
Fallers defeated advanced players, 104 versus 94, while 54 problems remained unchanged.
Net foreign purchases rose to P1.41 billion on Monday from P654.36 million on Friday.
“The recent rally pushed the PSEi past the critical resistance level of 6,800. We are now monitoring the 7,000 psychological resistances… as the next target,” Mr Vistan said. “This signals strong upside momentum that could push the index further if macroeconomic conditions remain supportive.” — RMD Ochaaf