PHILIPPINE STOCKS rebounded on Wednesday as May headline inflation was slower than expected and remained within the central bank’s annual target band.
The benchmark Philippine Stock Exchange index (PSEi) rose by 0.86% or 54.90 points to end at 6,441.32 on Wednesday, while the broader all shares index gained by 0.42% or 14.65 points to 3,453.69.
“The local bourse rose as investors cheered May’s inflation data, which came in at 3.9%, settling near the lower end of the Bangko Sentral ng Pilipinas’ (BSP) forecast for the month. The latest print also remained within the BSP’s 2-4% target range,” Philstocks Financial, Inc. Research and Engagement Officer Mikhail Philippe Q. Plopenio said in a Viber message.
Headline inflation quickened for a fourth straight month to 3.9% in May from 3.8% in April, the Philippine Statistics Authority reported on Wednesday.
Still, this was slower than the 6.1% print in the same month a year ago. The May consumer price index (CPI) was also within the BSP’s 3.7-4.5% forecast for the month and was a tad lower than the 4% median estimate in a BusinessWorld poll of 16 analysts conducted last week.
For the first five months, the CPI averaged 3.5%, within the BSP’s target range for the year.
The central bank expects inflation to average 3.5% this year.
“The statement from the BSP regarding the possibility of cutting policy rates ahead of the Federal Reserve raised rate cut hopes, which added to the positive sentiment. Lastly, positive cues from Wall Street influenced trading for Tuesday’s session,” Mr. Plopenio added.
“Philippines shares rebounded from prior losses, mirroring the move of the US equities in its last session and shrugging off the uptick in headline inflation this morning,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
BSP Governor Eli M. Remolona, Jr. on Tuesday reiterated that the Monetary Board could begin cutting rates before the US Federal Reserve.
At home, majority of sectoral indices closed higher. Holding firms rose by 1.77% or 98.95 points to 5,660.51; property climbed by 0.92% or 22.31 points to 2,444.21; services went up by 0.4% or 7.9 points to 1,950; and financials added 0.34% or 6.73 points to end at 1,987.27.
Meanwhile, mining and oil declined by 0.56% or 52.18 points to 9,163.42, and industrials slipped by 0.05% or 4.77 points to 9,027.70.
“Among the index members, SM Investments Corp. was at the top, rising 3.91% to P850. Converge ICT Solutions, Inc. lost the most, dropping 4.84% to P10.62,” Mr. Plopenio said.
Value turnover fell to P4.74 billion on Wednesday with 377.15 million shares changing hands from the P6.01 billion with 500.66 million issues traded on Tuesday.
Advancers outnumbered decliners, 103 to 82, while 46 names were unchanged.
Net foreign selling went down to P634.52 million on Wednesday from P1.32 billion on Tuesday. — R.M.D. Ochave
This article originally appeared on bworldonline.com