Philippine shares edge up on bargain hunting, Fed bets

Philippine shares inched higher on Tuesday on bargain hunting and mounting expectations that the US Federal Reserve will deliver its first rate cut for this year at its meeting next week.

The Philippine Stock Exchange index (PSEi) increased by 0.34% or 20.85 points to close at 6,122.71, while the broader all shares index rose by 0.23% or 8.81 points to end at 3,691.59.

“Philippine stocks cautiously edged higher on bargain hunting as investors step in to support prices following [Monday’s] drop,” AP Securities, Inc. Research Head Alfred Benjamin R. Garcia said in a Viber message.

“The local market rose backed by the positive cues from Wall Street. This comes amid mounting hopes of a Fed rate cut in their meeting this month following the US’ dismal August jobs report,” Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco said in a market report.

Wall Street’s main indexes gained on Monday on expectations that the US Federal Reserve could lower borrowing costs soon, Reuters reported.

Investors are expecting multiple rate cuts this year after a troubling nonfarm payrolls report on Friday confirmed a weakening US job market. The report, which had dragged down Wall Street in the previous session, has stoked fears of a potential slowdown in the world’s biggest economy.

Traders have fully priced in at least a 25-basis-point (bp) interest rate cut when the Fed wraps up its two-day policy meeting on Sept. 17, with interest rate futures reflecting a 10% chance of a 50-bp cut, according to CME Group’s FedWatch tool.

The Fed has kept its target rate at the 4.25%-4.5% range since December 2024.

Mr. Tantiangco noted that trading activity remained low on Tuesday, which shows weak market confidence. Value turnover increased to PHP 6.23 billion on Tuesday with 1.99 billion shares traded from the PHP 5.72 billion with 2.7 billion shares exchanged on Monday.

Almost all sectoral indices closed in the green on Tuesday. Mining and oil jumped by 2.1% or 234.95 points to 11,384.34; property climbed by 1.65% or 40.71 points to 2,500.37; services rose by 0.64% or 14.05 points to 2,196.28; financials increased by 0.28% or 5.81 points to 2,029.6; and holding firms edged up by 0.21 point to 5,049.72.

Meanwhile, industrials fell by 0.92% or 84.38 points to 8,997.84.

“The sector counters were mostly higher, except for industrials which was weighed down by index heavyweights Jollibee Foods Corp., Metro Pacific Investments Corp. and Universal Robina Corp.,” Mr. Garcia said.

“Ayala Land, Inc. was the day’s top index leader, climbing 3.9% to PHP 29.30. Globe Telecom, Inc. was the main index laggard, falling 2.99% to PHP 1,523,” Mr. Tantiangco added.

Advancers outnumbered decliners, 111 to 85, while 60 names were unchanged.

Net foreign selling dropped to PHP 215.89 million on Tuesday from PHP 340.8 million on Monday. — Alexandria Grace C. Magno with Reuters