PSEi advances after better job data, rate cut view

The Philippine Stock Exchange Index (PSEi) recovered on Tuesday after the local statistics agency reported better employment data for November.

The possibility of interest rate cuts this year also lifted investor sentiment, analysts said.

The main index added 0.14% or 9.3 points to close at 6,618.52. The broader all-share index gained 0.11% or 4.17 points to 3,503.68.   

Better employment figures lifted investor sentiment, Mikhail Philippe Q. Plopenio, research and engagement officer at Philstocks Financial, Inc. said in a Viber message.

“The local market inched up by 9.3 points to 6,618.52 as investors took positive cues from Wall Street overnight amid the decline in the US long-term treasury yields,” he said.

“The labor data for November were also cheered by many as it showed strong figures, with the employment rate rising to 96.4% from the preceding month’s 95.8%,” he added.

He said the local bourse was in positive territory for the whole session, but heavy selling occurred before the closing bell, trimming the gains, Mr. Plopenio said.

The Philippine Statistics Authority said the Philippine unemployment rate further eased to 3.6% in November from 4.2% a month and a year earlier.

The market improved after Finance Secretary Benjamin E. Diokno recently said the Philippine central bank might cut borrowing costs by as much as 100 basis points (bps) this year amid cooling inflation, Luis A. Limlingan, head of sales at Regina Capital Development Corp. said in a Viber message.

“Philippine shares traded higher and at one point flirted with the 6,700 level as investors assessed how to readjust their portfolios given that interest rates would soon be coming down,” he said.

At its December meeting, the BSP kept the benchmark rate steady at a 16-year high of 6.5%. Inflation rate averaged 6% in 2023, compared with a year earlier. 

Most sectoral indices declined. Mining and oil fell by 1.2% or 116.95 points to 9,620.02; industrials lost 0.63% or 58.84 points to 9,199.61; services retreated by 0.13% or 2.17 points to 1,639.56; and holding companies fell by 0.12% or 8.12 points to 6,378.27.

On the other hand, the financial index added 1.12%or 19.94 points to 1,786.60, while the property index gained 0.64% or 18.58 points to 2,898.02.

“Among the index members, San Miguel Corp. was at the top, climbing 4.11% to PHP 114. Converge ICT Solutions, Inc. lost the most, dropping 3.61% to PHP 9.35,” Mr. Plopenio said. 

Value turnover improved to PHP 5.75 billion with 405.37-million issues changing hands, compared with PHP 4.28 billion and 412.88 million issues on Monday.

Advancers outpaced decliners 81 against 76, while 67 issues were unchanged. 

Net foreign buying climbed to PHP 915.94 million from PHP 160.66 million a day earlier. — By Revin Mikhael D. Ochave, Reporter