PSEi extends gains on bets BSP will follow Fed cut

Philippine stocks extended their winning streak on Thursday, with investors betting that the Bangko Sentral ng Pilipinas (BSP) might soon follow the US Federal Reserve’s move to ease monetary policy, boosting appetite for risk assets.

The benchmark Philippine Stock Exchange index (PSEi) climbed 0.37% or 22.96 points to close at 6,233.62, while the broader all-share index added 0.15% or 5.84 points to 3,734.45. It was the PSEi’s third straight day of gains.

“Market reacted positively to the Fed’s rate cut, as this move could prompt a similar action from the BSP,” Luis A. Limlingan, head of sales at Regina Capital Development Corp., said in a Viber message. “A potential rate cut by the BSP may boost market sentiment, contributing to the recent upward movement in prices.”

He added that investors expect looser monetary policy to bolster economic activity and asset values.

The US Federal Reserve on Wednesday cut its benchmark rate by 25 basis points, its first reduction in almost a year, while signaling that two more cuts could follow before year-end.

Fed Chairman Jerome H. Powell pointed to weakness in the US labor market even as inflation showed signs of easing.

While Wall Street’s reaction was mixed — the Dow Jones Industrial Average closed higher, while the S&P 500 and Nasdaq slipped — Philippine investors viewed the Fed’s action as a cue for local easing.

Finance Secretary Ralph G. Recto earlier said the BSP could consider one or two 25-basis-point cuts in its policy meetings on Oct. 9 and Dec. 11, depending on US and domestic inflation trends.

Sectoral performance was mixed. Financials rose 1.04% to 2,123.69, holding firms gained 1.08% to 5,127.32 and services added 0.35% to 2,256.7. On the other hand, mining and oil sank 2.49% to 11,678.28, industrials slipped 0.62% to 8,987.12 and property shed 0.56% to 2,454.96.

Market breadth was almost flat, with 89 winners edging out 88 losers, while 66 stocks were unchanged. Net foreign selling totaled P55.05 million.

Value turnover thinned to PHP 6.87 billion from PHP 10.02 billion the previous day. A total of 2.09 billion shares changed hands, down sharply from Wednesday’s 7.48 billion. — Alexandria Grace C. Magno