PSEi up on bank stocks ahead of US inflation data

Local equities extended their climb on Wednesday led by a rise in bank stocks as sentiments were boosted ahead of the overnight release of the US consumer price index (CPI) report.

The Philippine Stock Exchange index (PSEi) climbed by 68.21 points or 1.06% to 6,466.85 on Wednesday, while the broader all shares index went up by 27.46 points or 0.8% to 3,457.33.

Unicapital Securities, Inc. Senior Equity Research Analyst Carlos Angelo O. Temporal said the PSEi jumped after the positive showing of US markets overnight and as investors continued to pick up bargain stocks.

“Banks have notably led the market’s surge, likely on the back of expectations that US CPI may support another Fed rate hike, which in turn may push for another BSP (Bangko Sentral ng Pilipinas) rate hike which will be accretive to big banks’ net interest margins,” Mr. Temporal added.

At the local bourse, BDO Unibank, Inc. was the top performer as it increased 4.41% or P6 to PHP 142 apiece.

Philstocks Financial, Inc. Research Analyst Claire T. Alviar said that the market’s upward performance was boosted by the anticipation of slower inflation in the US, which could affect the US Federal Reserve’s monetary decision.

In the US, inflation inched up 0.1% in May as gasoline prices fell, after increasing 0.4% in April. In the 12 months through May, the CPI climbed 4%. This was the smallest year-on-year increase since March 2021 and followed a 4.9% rise in April. Core CPI increased 0.4% in May, rising by the same margin for the third straight month.

The US central bank paused its monetary tightening cycle in June after hiking its key rate by 500 basis points (bps) since March last year to a range between 5% and 5.25%.

Back home, mirroring the US central bank, the BSP kept interest rates unchanged in June at 6.25% for a second straight meeting. It has raised borrowing costs by 425 bps from May 2022 to March 2023.

All sectoral indices rose on Wednesday except for mining and oil, which fell by 14.93 points or 0.15% to 9,849.11.

Meanwhile, financials rose by 48.39 points or 2.64% to 1,878.37; industrials gained 82.02 points or 0.9% to 9,149.54; property climbed by 15.48 points or 0.59% to 2,603.25; holding firms rose by 16.71 points or 0.26% to 6,322.19; and services went up by 3.02 points or 0.19% to close at 1,563.89.

Value turnover went up to PHP 5.25 billion on Wednesday with 734.94 million shares changing hands from the PHP 3.07 billion with 504.25 million issues seen on Tuesday.

Decliners outnumbered advancers, 92 versus 84, while 49 names closed unchanged.

Net foreign buying surged to PHP 1.32 billion on Wednesday versus the PHP 48.62 million in net buying seen on Tuesday. — Adrian H. Halili