LOCAL SHARES extended their gains on Thursday as investors continued to price in possible rate cuts by the US and local central banks.

The 30-member Philippine Stock Exchange index (PSEi) gained 76.28 points or 0.94% to close at 8,154.49 yesterday. The broader all-shares index also went up 35.80 points or 0.72% to 4,957.97

“Our index finished strong today after news from the [US Federal Reserve] and BSP (Bangko Sentral ng Pilipinas) buoyed market sentiment. The US Fed minutes showed a “strengthened” possibility of a rate cut which investors have been anticipating. BSP [Governor] Benjamin E. Diokno also said (on Wednesday) that a rate cut will precede the reduction in bank reserves,” Jervin S. de Celis, equity trader at the Timson Securities, Inc., said in a text message on Thursday.

Federal Reserve Chairman Jerome Powell in his congressional testimony on Wednesday set the stage for the rate cut this month, as records from policy makers’ latest meeting showed increasing fear that a US-China trade war that has done little to directly restrain growth is indirectly causing businesses to hold back on buying equipment, giving workers a raise and hiking their prices.

Luis A. Limlingan, head of sales of Regina Capital Development Corp. shared the same sentiment: “The local market hence rallied, following the S&P 500, which briefly pushing past 3,000 for the first time following the dovish testimony from Fed chairman. The Nasdaq also closed at a record high on Wednesday with strength in the semiconductors with news that US trade delegate team had make contact with its Chinese counterparts, with plan of a China visit in the coming weeks.”

On Wall Street, the Dow Jones Industrial Average rose 76.71 points or 0.29% to 26,860.2; the S&P 500 gained 13.44 points or 0.45% to 2,993.07; and the Nasdaq Composite added 60.80 points or 0.75% to 8,202.53.

Most Southeast Asian stock markets also rose on Thursday, with Singapore leading gains, as investors cheered Mr. Powell’s comments bolstering prospects of an interest rate cut.

Back home, sub-sectors mostly ended in the green. Property went up by 95.32 points or 2.19% to 4,438.50; financials gained 30.53 points or 1.75% to 1,766.18; holding firms rose 17.29 points or 0.22% to 7,812.97; and services climbed 13.93 points or 0.83% to 1,687.90.

Meanwhile, industrials lost 40.91 points or 0.34% to end at 11,853.80. The mining and oil counter also declined 19.15 points or 0.25% to close at 7,397.69.

Some 1.27 billion issues valued at P6.09 billion switched hands on Thursday, higher than the previous session’s P5.36 billion.

Advancers trumped losers, 124 to 74, while 49 names closed unchanged.

Foreigners were sellers with P253.73 million in net outflows yesterday, a reversal of Wednesday’s net purchases worth P19.40 million. — Vincent Mariel P. Galang with Reuters