The PSE index rises to the level of 6,900 on the hope of an interest rate cut

THE BELLWETHER INDEX climbed for a third straight day on Tuesday to finish above 6,900 points on expectations for further monetary policy easing by the Bangko Sentral ng Pilipinas (BSP).

The Philippine Stock Exchange index (PSEi) rose 0.79% or 54.89 points on Tuesday to end at 6,944.76, while the broader all-stock index rose 0.61% or 22.64 points to end at 3,729 ,09.

This was the highest closing price of the PSEi in more than four months, or since closing at 6,960.43 on April 2.

The index also breached the 7,000 level intraday and recorded a high of 7,005.27 during the session.

“The local market rose further this Tuesday…Expectations that the BSP will continue easing monetary policy, and positive cues from Wall Street continued to improve sentiment,” Philstocks Financial, Inc. said. Senior Research Analyst Japhet Louis O. Tantiangco in a press release. a Viber message.

“Philippine stocks reached the 6,900 level and are now just a stone’s throw away from the 7,000 level as investors continue to buy into strong gains and the recent 25 basis points (bp) cut…,” Regina Capital Development Corp. of Sales Luis A. Limlingan said in a Viber message.

The BSP cut its benchmark interest rate for the first time in almost four years on Thursday, amid an improving inflation and economic outlook, with the governor signaling at least one more cut before the end of the year.

The Monetary Board cut the policy rate by 25 basis points to 6.25%, as expected by nine of the sixteen analysts surveyed in a Business world poll.

BSP Governor Eli M. Remolona Jr. said at a briefing that they could cut rates by another 25 basis points within a year. The remaining policy-setting meetings of the Monetary Board this year are scheduled for October 17 and December 19.

Analysts expect the BSP easing cycle to continue into next year, amid stabilizing inflation, with a cut of at least 100 basis points in 2025.

“Investors also welcomed the balance of payments (BoP) surplus that the Philippines posted in July and the strengthening of the local currency,” Mr. Tantiangco added.

The country’s BoP position swung to a surplus of $62 million in July, compared with a deficit of $53 million in the same period last year, BSP data showed.

Meanwhile, the peso closed Tuesday at a more than four-month high of P56.55 per dollar, up nine centavos from Monday’s close.

Sectoral indices were split. Financial values ​​rose by 2.54% or 51.84 points to 2,091.92; services increased by 2.13% or 46.57 points to 2,227.19; and holdings rose 0.22% or 13.12 points to 5,853.17. Meanwhile, industrials fell 0.83% or 77.13 points to 9,194.85; real estate fell by 0.83% or 23.39 points to 2,765.09; and mining and oil fell 0.25% or 21.41 points to 8,236.19.

Value turnover rose to P8.09 billion on Tuesday with 673.38 million issues changing hands, while the P7.64 billion with 625.66 million shares traded on Monday.

There were more decliners than advancers, 120 versus 89, while 51 names closed unchanged.

Net foreign purchases rose to P2.06 billion on Tuesday from P1.41 billion on Monday. — RMDO