PSEi rises as Powell hints at a Fed rate cut in September

PHILIPPINE SHARES rose further on Thursday after the US Federal Reserve hinted at a rate cut in September.

The Philippine Stock Exchange index (PSEi) rose 1.12% or 74.74 points on Thursday to end at 6,693.83, while the broader all-stock index rose 0.87% or 31.47 points to end at 3,629 ,18.

“The local market rose after investors took positive cues from Wall Street overnight as the Fed indicated a September rate cut could be possible. It is believed that a Fed rate cut will somehow give more room to the Bangko Sentral ng Pilipinas to ease its own policy,” Philstocks Financial, Inc. said. Research and Engagement Officer Mikhail Philippe Q. Plopenio in a Viber message.

“Philippine stocks started the month on a buying spree following sentiment from the Fed meeting. Earnings were affected by Fed Chairman Jerome H. Powell signaling the possibility of a rate cut at the next meeting if data continues to point to declining inflation,” said Regina Capital Development Corp. sales chief Luis A. Limlingan. in a Viber message.

Mr Powell said on Wednesday that interest rates could be cut as early as September if the US economy follows the expected path, putting the central bank near the end of a more than two-year battle against inflation but in the midst of the presidential election the country stands. election campaign, Reuters reported.

The Fed concluded its latest two-day policy meeting with a decision to keep its benchmark interest rate steady within the 5.25%-5.5% range set a year ago, but its statement softened its description of inflation and said the risks to employment had become smaller. now on par with rising prices – neutral language that opens the door to a drop in interest rates after more than two years of tightening credit.

Mr Powell drove the message home even further in his post-meeting press conference, noting that price pressures are now broadly easing across the economy – what he called “quality disinflation” – and that as the coming figures develop as expected, support for interest rate cuts could emerge. will grow.

Investors saw Powell’s comments as clearly setting the stage for a reduction in borrowing costs at the Fed’s September 17-18 meeting.

All sector indices closed higher on Thursday. Financials rose 2.75% or 54.75 points to end at 2,045.02; mining and oil rose 1.7% or 141.70 points to 8,463.79; real estate rose by 1.34% or 34.68 points to 2,608.93; services increased by 1.23% or 24.91 points to 2,042.16; holdings rose 0.31% or 18.06 points to 5,794.83; and industrials added 0.06% or 5.66 points to close at 9,274.82.

Value turnover fell to P4.39 billion on Thursday, with 449.8 million shares changing hands, down from P5.62 billion, while 421.19 million shares were traded on Wednesday.

The advanced players defeated the declining players, 104 versus 75, while 50 issues ended unchanged.

Net foreign sales rose to P42.78 million on Thursday from P19.79 million on Wednesday. — RMD Ochaaf of Reuters