By Arra B. Francia, Senior Reporter

LOCAL stocks extended gains on Friday ahead of the president’s State of the Nation Address (SONA) next week, as the local central bank noted lower inflation expectations until 2020.

The 30-member Philippine Stock Exchange index (PSEi) rose 015% or 12.02 points to close at 8,270.07. The broader all shares index likewise added 0.03% or 1.73 points to 5,010.71.

“2019 lower inflation and stronger peso forecast from our economic managers and rate cut expectations from the Fed lifted the local market today by 12.02 points to 8,270.07,” Philstocks Financial, Inc. said in a market note.

The Bangko Sentral ng Pilipinas (BSP) released on Friday its quarterly inflation report for the second quarter of 2019, where it noted that inflation had fallen to 3% from 3.8% in the first quarter.

“Analysts expect inflation to remain manageable and within the government’s target range, with risks to the inflation outlook likely to be broadly balanced,” according to the BSP’s report, based on its survey of inflation expectations from private sector economists as of June 2019.

Overseas, the New York Federal Reserve President John Williams hinted at an interest rate cut in the future, boosting investor sentiment in most international markets.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan also attributed the market’s uptick to the Federal Reserve’s comments.

“The pre-SONA mood, dovish Fed, gold spike and developments on the geopolitical front drove investors to slowly accumulate the market to end the week,” Mr. Limlingan said in a mobile phone message.

In Wall Street, the Dow Jones Industrial Average eked out gains of 0.01% or 3.12 points to 27,222.97. The S&P 500 index firmed up 0.36% or 10.69 points to 2,995.11, while the Nasdaq Composite index climbed 0.27% or 22.04 points to 8,207.24.

Asian markets rallied, with Japan’s Nikkei 225 surging 2% or 420.75 points to 21,466.99. The Hang Seng index jumped 1.15% or 325.98 points to 28,787.64, while the Shanghai Composite went up 0.79% or 23.02 points to 2,924.20.

Locally, four sectoral indices ended in positive territory, led by mining and oil which jumped 2.21% or 175.55 points to 8,126.27. Financials climbed 0.34% or 6.26 points to 1,877.28; property went up 0.25% or 11.21 points to 4,423.57, while holding firms increased 0.11% or 8.67 points to 7,942.92.

Meanwhile, industrial dropped 0.45% or 52.28 points to 11,704.70, and services slipped 0.02% or 0.41 points to 1,681.71.

Turnover improved to P6.74 billion after some 1.46 billion issues switched hands, higher than Thursday’s P5.60 billion.

Decliners outpaced advancers, 102 to 94, while 53 names were unchanged.

Net foreign buying inched up to P759.81 million, versus the previous session’s P540.72 million.

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