Stocks rise on slower-than-expected inflation

Philippine shares rebounded on Tuesday as data showed slower-than-expected inflation in September and as investors went bargain hunting.

The Philippine Stock Exchange index (PSEi) jumped by 1.39% or 83.51 points to close at 6,083.83, while the broader all shares index rose by 0.8% or 29.27 points to end at 3,673.22.

“The PSEi rose today as the market reacted positively to the latest inflation rate, which came in lower than expected. This figure helped restore confidence among market participants, boosting sentiment and encouraging renewed buying interest across key sectors,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The local market bounced back this Thursday following its drop near the 6,000 support as investors hunted for bargains,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message. “The favorable inflation figure supports the country’s consumer outlook and raises the possibility of further easing by the BSP (Bangko Sentral ng Pilipinas).”

Headline inflation picked up to 1.7% in September from 1.5% in August, the Philippine Statistics Authority reported on Tuesday.

This was the fastest pace in six months or since the 1.8% print in March, but was within the BSP’s 1.5-2.3% forecast for the month and below the 1.9% median estimate in a BusinessWorld poll of 12 analysts.

For the first nine months, the consumer price index (CPI) averaged 1.7%, matching the BSP’s forecast for the year and still below its 2-4% annual target.

The Monetary Board will hold its penultimate policy meeting for the year on Thursday (Oct. 9), with analysts divided on their rate call. Ten of the 16 analysts in a BusinessWorld poll expect the central bank to pause anew after it delivered three straight cuts, while the remaining six said a fourth consecutive 25-basis-point (bp) reduction could happen this week to help support domestic demand and boost the economy.

The central bank has lowered benchmark borrowing costs by a total of 150 bps since it kicked off its easing cycle in August 2024, with the policy rate now at 5%.

All sectoral indices closed in the green on Tuesday. Financials jumped by 2.22% or 45.48 points to 2,087.52; property surged by 1.49% or 33.75 points to 2,295.62; industrials rose by 1.13% or 100.50 points to 8,969.07; holding firms increased by 0.83% or 40.50 points to 4,908.72; mining and oil climbed by 0.47% or 64.35 points to 13,669.64; and services went up by 0.42% or 9.63 points to 2,262.11.

Value turnover declined to PHP 10.35 billion on Tuesday with 2.37 billion shares traded from the PHP 12.12 billion with 2.07 billion stocks that changed hands on Monday.

Advancers outnumbered decliners, 97 to 92, while 60 names closed unchanged.

Net foreign selling went down to PHP 218.1 million on Tuesday from PHP 341 million on Monday. — A.G.C. Magno