PSEi snaps four-day skid amid BSP easing hopes

THE MAIN INDEX ended its four-day skid on Monday as the central bank chief said they could consider cutting benchmark rates this year and following US markets’ rise last week.

The benchmark Philippine Stock Exchange index (PSEi) improved by 79.93 points or 1.22% to end at 6,583.47 on Monday, while the broader all-shares index rose by 28.04 points or 0.81% to close at 3,479.82. 

China Bank Capital Corp. Managing Director Juan Paolo E. Colet said the local bourse improved after Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona, Jr., said rate cuts are “possible but maybe not likely” within this semester.

“BSP Governor Remolona’s remarks that a policy rate cut is possible, though not likely, in the first half of this year was also viewed positively by some investors who saw it as a signal that the Monetary Board (MB) was not totally closed to a dovish shift in the next few months,” Mr. Colet said.

The BSP chief earlier said that it may need to keep policy settings tighter for longer until inflation settles more firmly within target.

The Monetary Board hiked benchmark borrowing costs by 450 basis points from May 2022 to October 2023 to help bring down elevated inflation, bringing the policy rate to a 16-year high of 6.5%.

Mr. Colet said US markets’ gains on Friday also pushed the local bourse up.

“The local bourse gained by 79.93 points to 6,583.47 on a technical bounce following four consecutive days of decline. Moreover, positive cues from the US markets last Friday contributed to lifting the market,” Philstocks Financial, Inc. Research Analyst Claire T. Alviar likewise said in a Viber message.

She however noted that the rally was “weak” as value turnover remained low, falling to PHP 4.56 billion on Monday with 301.17 million issues switching hands from the PHP 6.19 billion with 301.39 million shares seen on Friday.

The S&P 500 posted a record- high close on Friday for the first time in two years, fueled by a rally in chipmakers and other heavyweight technology stocks on optimism around artificial intelligence, Reuters reported.

The S&P 500 jumped 1.23% to end the session at 4,839.81 points. The Nasdaq jumped 1.7% to 15,310.97 points, while Dow Jones Industrial Average rose 1.05% to 37,863.80 points.

Back home, the majority of the market’s sectoral indices closed higher on Monday, with industrials being the lone decliner, losing 11.43 points or 0.12% to end at 9,066.51. 

Mining and oil rose by 151.91 points or 1.64% to 9,362.11; holding firms climbed by 94.85 points or 1.52% to 6,317.30; property went up by 42.94 points or 1.52% to 2,859.62; financials increased by 24.51 points or 1.35% to 1,837.19; and services added 15.23 points or 0.95% to end at 1,610.32.

Advancers beat decliners, 94 against 85, while 48 names closed unchanged.

Net foreign buying stood at PHP 97.27 million on Monday versus the PHP 802.43 million in net selling seen the previous trading day. — R.M.D. Ochave with Reuters