PSEi rises as market awaits Fed, BSP decisions

STOCKS climbed on Wednesday as investors stayed on the sidelines ahead of the policy decisions of the US Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

The benchmark Philippine Stock Exchange index (PSEi) went up by 15.52 points or 0.23% to close at 6,546.27 on Wednesday, while the broader all shares index rose by 6.47 points or 0.18% to end at 3,499.97.

“This Wednesday, the local bourse extended its rally… ahead of the respective decision of the Federal Reserve and Bangko Sentral ng Pilipinas on interest rates. Positive sentiment from Wall Street overnight helped to lift the bourse as well,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar said in a Viber message.

“Aside from the interest rate decision, investors also want to know the outlook of the mentioned central banks on the economy, especially amid the banking crisis and the still-elevated inflation rate. Given this, many investors were on the sidelines,” Ms. Alviar added.

Value turnover went down to PHP 4.23 billion on Wednesday with 413.61 million shares changing hands from the PHP 4.78 billion with 545.92 million issues traded on Tuesday.

“Shares… staged a cautious bounce as hopes of a global banking crisis would be averted, while investors remain uncertain over the outlook for US interest rates as the Federal Reserve holds a high stakes meeting on policy,” Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said in a Viber message.

“The still-brittle mood was evident amid fears of financial risk and a flight from bank stocks, which puts the Fed in a tough position as it decides whether to raise interest rates… On the local front, the central bank may consider a smaller 25-basis-point (bp) rate hike or even pause monetary policy tightening at its meeting on Thursday amid heightened global uncertainties,” Mr. Arce said.

The Fed will hold its second policy meeting for the year on March 21-22, while the BSP’s review will be held on March 23.

The US central bank hiked its target interest rate by 25 bps at its January 31 to February 1 meeting to a range between 4.5% and 4.75%. Since March 2022, the Fed has raised rates by a total of 450 bps.

Meanwhile, the BSP last month raised benchmark interest rates by 50 bps for a second straight meeting, bringing its policy rate to 6%. It has hiked borrowing costs by 400 bps since May 2022 as it seeks to bring down elevated inflation.

The majority of sectoral indices closed higher on Wednesday, except for holding firms, which went down by 15.42 points or 0.24% to 6,353.03; and mining and oil, which dropped by 6.14 points or 0.05% to 10,661.01.

Meanwhile, services climbed by 16.99 points or 1.06% to 1,608.98; financials rose by 9.24 points or 0.51% to 1,797.03; industrials increased by 37.56 points or 0.39% to 9,454.73; and property added 7.92 points or 0.28% to close at 2,771.25.

Advancers outnumbered decliners, 98 to 77, while 49 names closed unchanged.

Net foreign selling went down to PHP 9.87 million on Wednesday from PHP 33.74 million on Tuesday. — A.H. Halili