THE PHILIPPINE STOCK EXCHANGE index (PSEi) snapped a five-day losing streak on Friday, with the financial sectoral index gaining the most a day after the Bangko Sentral ng Pilipinas (BSP) announced a 200 basis point phased cut to big banks’ 18% reserve requirements ratio (RRR).

The PSEi gained 108.66 points or 1.45% to finish 7,583.82 — but still marked the second straight weekly fall of 2.05% — while the all-shares index increased by 50.41 points or 1.08% to end 4,713.27.

“Sentiment got a boost from the BSP’s decision to cut the reserve requirement

by 200bps in three stages beginning with a 100bps cut on May 31,” RCBC Securities, Inc. said in a Stock Market Weekend Recap authored by research analyst Fiorenzo D. De Jesus.

Timson Securities, Inc. trader Jervin S. De Celis said the BSP’s latest policy step provided “a cushion for this falling market.”

“This move by the BSP means more liquidity in the economy and more money for banks to lend for growth amid slowing inflation and lower-than-expected [5.6%] GDP [growth] rate in the first quarter,” Mr. De Celis said in a mobile phone message on Friday.

“However, this bounce may not last at all because investors will be rebalancing their portfolio in accordance with the changes in the index weights reported by MSCI.”

Regina Capital Development Corp. Managing Director Luis A. Limlingan said Wall Street’s rise on Thursday in the wake of strong macroeconomic data and bargain hunting at home fueled PSE’s recovery on Friday. At the same time, “… [i]nvestors weighed the latest developments on the trade front after President Donald Trump appeared to target Chinese telecommunications group Huawei with an emergency declaration against threats to US technology,” Mr. Limlingan said in a text message.

Four of the six local sectoral indices gained: financials by 37.35 points or 2.24% to finish 1,700.73, services by 38.37 points or 2.4% to 1,636.59, property by 65.62 points or 1.61% to 4,138.89 and holding firms by 74.45 points or 1.06% to 7,069.9.

Mining & oil fell by 31.28 points or 0.42% to finish 7,256.66, while industrials gave up 32.55 points or 0.29% to end 11,058.42.

Stocks that gained outnumbered those that lost 122 to 72, while 40 issues ended flat.

Trading thinned as Friday saw 935.86 million shares worth P8.207 billion change hands, compared to Thursday’s 2.325 billion shares worth P8.56 billion.

Investors abroad remained predominantly bearish, although net sales slipped to P1.387 billion on Friday from Thursday’s P1.854 billion. RCBC Securities’ Mr. De Jesus noted that the week saw “massive net foreign selling of almost P6 billion”. — J. C. Lim