PSEi back above 6,000 mark on rate cut hopes

Philippine stocks closed above the 6,000 mark for the first time in a month as investors took advantage of bargains and with sentiment getting a boost from expectations of further monetary policy support from the Bangko Sentral ng Pilipinas (BSP).

The bellwether Philippine Stock Exchange index (PSEi) rose by 0.4% or 24.46 points to close at 6,021.59, while the broader all shares index increased by 3.41% or 116.66 points to 3,535.18.

This was the PSEi’s best finish in a month or since it closed at 6,053.96 on Oct. 23, which was also the last time it ended above the 6,000 line.

“The local bourse closed higher, lifted by a late-session buying surge that helped sustain the market’s upward momentum,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“Investor sentiment improved amid growing expectations of another policy rate cut before the year ends, despite the peso depreciating against the US dollar. This also stems from inflation remaining below the BSP’s target range, providing room for further monetary easing,” he added.

Last week, BSP Governor Eli M. Remolona, Jr. said they could deliver a fifth straight 25-basis-point (bp) cut at the Monetary Board’s Dec. 11 meeting to help provide economic stimulus following the weak growth seen last quarter as a corruption scandal involving government infrastructure projects has weakened consumer and investor confidence.

The central bank has lowered borrowing costs by a total of 175 bps since it began its easing cycle in August 2024, with the policy rate now at an over three-year low of 4.75%.

Philippine gross domestic product (GDP) grew by 4% in the third quarter, the slowest in over four years. This brought the nine-month average to 5%, below the government’s 5.5-6.5% GDP growth target for the year.

Continued bargain hunting activities and opportunities for bottom-fishing and discounts following the market’s recent slide helped lift the market on Monday, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort added in a Viber message.

Majority of sectoral indices ended higher on Monday. Industrials climbed by 1.32% or 114.86 points to 8,765.41; property increased by 1.27% or 28.11 points to 2,239; holding firms went up by 1.08% or 50.98 points to 4,748.42; and mining and oil rose by 0.65% or 82.03 points to 12,621.14.

Meanwhile, services declined by 0.21% or 5.19 points to 2,399.89 and financials shed 0.14% or 2.79 points to end at 1,989.45.

Market breadth was positive as advancers outnumbered decliners, 109 to 72, while 64 names were unchanged.

Value turnover surged to PHP 13.69 billion on Monday with 846.2 million shares traded from the PHP 9.15 billion with 1.67 billion issues exchanged on Friday.

Net foreign selling went down to PHP 815.91 million on Monday from PHP 1.97 billion on Friday. — Alexandria Grace C. Magno