PSE index inches up before central bank meetings

The main index inched up on Tuesday on last-minute buying, with the market in a mostly guarded mood before the policy meetings of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

The Philippine Stock Exchange index (PSEi) climbed by 0.46% or 27.42 points to end at 5,976.64. Meanwhile, the broader all shares index decreased by 0.33% or 11.47 points to 3,466.21.

“The local bourse moved relatively flat and quiet for today’s session as investors remained cautious. Market participants are closely monitoring the upcoming BSP and US Federal Reserve policy decisions as traders are likely waiting for clearer signals before taking stronger positions,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

The Fed was set to begin its two-day policy meeting overnight, where it is widely expected to lower borrowing costs.

The spotlight, though, is on what comes after the Fed’s December rate cut, with bond investors positioning for a shallow US easing cycle and many Wall Street banks predicting fewer Fed interest rate cuts in 2026 on lingering inflation concerns and expectations of a more resilient US economy, Reuters reported.

Traders are pricing in 77 basis points (bps) of easing by the end of next year, according to LSEG data. While a rate cut is broadly expected, some strategists think the Fed’s policy committee could be sharply divided.

Meanwhile, a BusinessWorld poll showed that 17 of 18 analysts expect the BSP to deliver a fifth straight 25-bp reduction at the Monetary Board’s meeting on Thursday (Dec.11) to bring the policy rate to 4.5%, its lowest since September 2022.

The central bank has lowered benchmark rates by a total of 175 bps since it began its easing cycle in August 2024.

“The main index completely turned on its head at the last minute as foreign investors stepped in to support ICT’s ascent to a new all-time high to end up at PHP 600,” AP Securities, Inc. said in a market note, referring to the ticker symbol of International Container Terminal Services, Inc. The company’s shares surged by PHP 13 or 2.21% from Friday’s close of PHP 587 each.

Sectoral indices ended mixed on Tuesday. Property rose by 1.62% or 35.77 points to 2,238.26; services increased by 0.82% or 20.35 points to 2,496.69; and holding firms went up by 0.65% or 30.31 points to 4,681.35.

Meanwhile, mining and oil declined by 2.5% or 354.97 points to 13,817.14; financials shed 0.9% or 17.68 points to end at 1,926.53; and industrials went down by 0.12% or 10.36 points to 8,463.66.

Market breadth was negative as decliners outnumbered advancers, 132 to 83, while 48 names were unchanged.

Value turnover jumped to PHP 10.55 billion on Tuesday with 1.19 billion shares traded from the PHP 5.8 billion with 1.08 billion issues exchanged on Friday.

Net foreign selling ballooned to PHP 2.63 billion from Friday’s PHP 598.26 million. — Alexandria Grace C. Magno with Reuters