Stocks end higher as markets eye BSP, Fed cuts

Stocks rebounded on Wednesday as investors bought cheap shares and amid bets on further monetary policy easing by both the Bangko Sentral ng Pilipinas (BSP) and the US Federal Reserve at their meetings next month.

The bellwether Philippine Stock Exchange index (PSEi) rose by 0.47% or 28.53 points to close at 6,004.70, while the broader all shares index decreased by 0.78% or 28.17 points to 3,546.65.

“The local market bounced back as investors hunted for bargains. Rate cut hopes for the BSP and the Fed in their December meeting were seen as the main reason for the positive sentiment today,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message.

“Our main index treaded within a range before ending up higher as the case for a December US Fed cut got stronger after registering softer US retail sales data and consumer confidence sinking to a seven-month low,” AP Securities, Inc. said in a market note.

Last week, BSP Governor Eli M. Remolona, Jr. said they could deliver a fifth straight 25-basis-point (bp) cut at the Monetary Board’s Dec. 11 meeting to help provide economic stimulus following the weak growth seen last quarter as a corruption scandal involving government infrastructure projects has weakened consumer and investor confidence.

The central bank has lowered borrowing costs by a total of 175 bps since it began its easing cycle in August 2024, with the policy rate now at an over three-year low of 4.75%.

Meanwhile, Asian stocks rose on Wednesday, chasing gains on Wall Street as weaker-than-expected economic data spurred expectations that the US Federal Reserve will cut interest rates at its policy meeting next month, Reuters reported.

The prints firmed up expectations that the Fed will ease policy soon and prompted speculation that some emerging market Asian central banks could follow.

Fed funds futures are pricing an implied 80.7% probability of a 25-bp cut at the US central bank’s next meeting on Dec. 10, compared to even odds a week ago, according to the CME Group’s FedWatch tool.

Back home, most sectoral indices closed higher on Wednesday. Property rose by 1.31% or 28.64 points to 2,210.76; financials increased by 1.24% or 24.79 points to 2,023.55; services went up by 0.84% or 20.18 points to 2,409.96; mining and oil climbed by 0.09% or 12.73 points to 13,353.68; and industrials edged up by 0.07% or 6.31 points to 8,622.02. Meanwhile, holding firms declined by 1.31% or 62.29 points to 4,678.15.

Advancers and decliners were split at 89 apiece, while 66 names were unchanged.

Value turnover went up to PHP 12.25 billion on Wednesday with 1.19 billion shares traded from the PHP 9.51 billion with 1.17 billion issues exchanged on Tuesday.

Net foreign buying was at PHP 2.38 billion on Wednesday, a turnaround from the PHP 2.98 billion in net selling on Tuesday. — Alexandria Grace C. Magno with Reuters