Manila, Philippines – The Philippine Stock Exchange index (PSEi) rebounded from Monday’s sell-off as investors cheered the latest inflation data that bolstered chances the central bank will cut borrowing costs later this week.
The bellwether index gained 1.39 percent to end Tuesday’s trade at 6,083.83, steering clear of the wobbly 6,000 support.
“The market… took positively the Philippines’ latest inflation print of 1.7% which remained benign,” brokerage house PhilStocks Financial said in a research note.
“The favorable inflation figure supports the country’s consumer outlook and raises the possibility of further easing by the BSP,” it added.
September’s inflation reading brought the year-to-date average inflation to 1.7 percent, which is well below the target of the Bangko Sentral ng Pilipinas for the year. The Monetary Board meets on Thursday, Oct. 9, to review interest rates.
Low interest rates often support higher prices in the stock market because lower bond yields can make the potentially higher yields that listed companies pay end up more palatable to investors.
Expectations of another rate cut lifted banking shares the most, with gains of 2.23 percent. All other counters shifted to positive territory. Advancers edged decliners, 97 to 92.
“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, another brokerage firm, said in a note to investors.
