PSEi rebounds as investor sentiment improves

Shares rose on Wednesday as growing expectations of interest rate cuts in the United States and positive prospects for the Philippine economy boosted sentiment.

The Philippine Stock Exchange index (PSEi) rose by 0.3% or 20.62 points to end at 6,687.71 on Wednesday, while the broader all shares index improved by 0.24% or 8.69 points to finish at 3,594.62.

“Philippine shares closed in the positive territory as investors continued rotating across the board into names that would be prime beneficiaries of a rate cut,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The local bourse rose… due to positive cues from Wall Street overnight, amid optimism towards second-quarter corporate results and hopes of a rate cut soon by the Federal Reserve,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

Wall Street stocks rose and the Dow Jones Industrial Average hit an all-time closing high on Tuesday after US retail sales data supported the view that the US Federal Reserve is approaching its easing cycle, reining in inflation while avoiding a recession, Reuters reported.

The Dow Jones Industrial Average rose 742.76 points or 1.85% to 40,954.48; the S&P 500 gained 35.98 points or 0.64% at 5,667.20; and the Nasdaq Composite added 36.77 points or 0.2% at 18,509.34.

“Sentiment was further lifted as some institutions maintained their economic growth projections for the Philippines,” Ms. Alviar added.

The Asian Development Bank and International Monetary Fund have kept their gross domestic product (GDP) growth forecasts for the Philippines at 6% for this year and 6.2% in 2025, they said in separate reports this week.

The 2024 outlook is at the low end of the government’s 6-7% growth target. Meanwhile, the 2025 projection is below the 6.5-7.5% goal for that year.

For its part, the ASEAN+3 Macroeconomic Research Office (AMRO) trimmed its Philippine economic growth forecasts for this year and in 2025. AMRO sees Philippine GDP expanding by 6.1% this year, slightly lower than the 6.3% in the April report. It also downgraded its 2025 growth forecast to 6.3% from 6.5%.

The Philippine economy expanded by 5.5% in 2023.

Sectoral indices were split. Mining and oil climbed by 4.26% or 366.97 points to 8,964.24; holding firms went up by 1.14% or 65.91 points to 5,831.82; and industrials increased by 0.43% or 39.63 points to 9,171.38. Meanwhile, property fell by 0.34% or 9.24 points to 2,687.80; financials decreased by 0.3% or 6.18 points to 1,994.35; and services inched down by 0.22% or 4.48 points to 2,024.79.

Value turnover went down to PHP 4.22 billion on Wednesday with 694.38 million shares changing hands from PHP 5.4 billion with 352.93 million shares traded on Tuesday.

Advancers narrowly beat decliners, 97 versus 95, while 42 issues ended unchanged.

Net foreign buying rose to PHP 715.58 million on Wednesday from PHP 304.96 million on Tuesday. — R.M.D. Ochave with Reuters