The local stock index inched up Tuesday and reached its highest level since July 26, 2023 amid expectations that interest rates would soon go down.
The peso ended weaker, touching 56 to the dollar.
The Philippine Stock Exchange index recorded a rise of 9.3 points or 0.14 percent, reaching a closing value of 6,618.52.
The broader all shares index also experienced a positive shift, increasing by 4.17 points or 0.12 percent.
“Philippine shares traded higher, and at one point flirted with the 6,700 level as investors assessed how to readjust their portfolios given that interest rates would soon be coming down,” said Luis Limlingan of Regina Capital Development Corp.
In an interview with Bloomberg TV, finance secretary Benjamin Diokno said he anticipates the central bank to consider a rate cut of up to 100 basis points within the current year.
Diokno said that if the Fed implements a 75-bps cut during the year, the BSP may align its actions accordingly, potentially matching or even exceeding it with a 100-bps reduction.
“Meanwhile, (global research firm) BMI suggests that the hiking cycle in the Philippines has likely come to an end after the BSP’s meeting on December 14. BMI noted that diminishing price pressures have diminished the necessity for the BSP to incline towards implementing new interest rate hikes to stabilize inflation expectations,” Limlingan added.
Most of the sectors were in the red, however, with miners taking the lead with a drop of 1.2 percent.
Financials and property were the only sectors with positive outturns, with increases of 1.13 percent and 0.64 percent, respectively.
The market’s total value turnover reached P5.75 billion.
Market dynamics favored the advancers, as they outperformed decliners.
Specifically, there were 81 advancing stocks, 76 decliners, and 67 stocks that remained unchanged.
The peso closed at 56.01 to the dollar, down from 55.69 on Monday.
The currency opened at 55.73 and touched a low of 56.09 and a high of 55.635. Trading volume amounted to $2.2 billion.
Emerging Asian currencies were range-bound on Tuesday, while most equities in the region edged higher, as traders awaited inflation data from the US for clues on the Federal Reserve’s monetary policy stance this year. – Angela Celis and Reuters
