PSEi rises slightly as inflation stays within target

By Arra B. Francia, Senior Reporter

THE MAIN INDEX firmed up on Thursday as investors reacted to May inflation data and a potential rate cut by the US Federal Reserve.

The benchmark Philippine Stock Exchange index (PSEi) added 0.18% or 14.49 points to close at 7,959.86 yesterday, recovering slightly from the previous session’s plunge. The broader all-shares index eked out gains of 0.03% or 1.65 points to 4,884.87.

“Market was up today as inflation rate falls within the BSP (Bangko Sentral ng Pilipinas) expectation level of 3.2% with room for further monetary policy easing to stimulate the local economy as oil price continues to go down,” Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a text message on Thursday.

The Philippine Statistics Authority reported on Wednesday that inflation accelerated to 3.2% in May, higher than April’s 3%. This is within the BSP Department of Economic Research’s 2.8-3.6% estimate range and also within the government’s 2-4% target for the year.

For Regina Capital Development Corp. Head of Sales Luis A. Limlingan, positive sentiment from international markets propped up the local stock barometer on Thursday.

“Shares in the PSEi traded slightly up with regional markets rallying the past session as the Fed chairman signalled an openness to rate cuts,” Mr. Limlingan said in a mobile phone message.

Wall Street indices continued to rally after Fed Chairman Jerome Powell said they may cut interest rates to prevent the US economy from slowing down in light of its ongoing trade disputes with Mexico and China.

The Dow Jones Industrial Average advanced 0.82% or 207.39 points to 25,539.57. The S&P 500 index racked up 0.82% or 22.88 points to 2,826.15, while the Nasdaq Composite index was up 0.64% or 48.36 points to 7,575.48.

In contrast, Asian indices were mixed as investors were more focused on trade war concerns. Japan’s Nikkei 225 was down 0.01% or 2.06 points to 20,774.04. The Hang Seng index picked up 0.16% or 43.41 points to 26,938.85. The Shanghai Composite fell 1.17% or 33.62 points to 2,827.80.

Back home, four sectoral indices were in positive territory, led by mining and oil which jumped 0.78% or 56.92 points to 7,336.93. Financials rose 0.54% or 9.39 points to 1,722.74; holding firms climbed 0.45% or 34.68 points to 7,625.78, while services went up 0.09% or 1.55 points to 1,664.47.

Meanwhile, property slumped 0.29% or 12.70 points to 4,336, while industrials slipped 0.19% or 22.12 points to 11,567.99.

Some 674.77 million issues valued at P7.34 billion switched hands, lower than Tuesday’s P10.55-billion turnover.

Foreign investors were net sellers on Thursday at P425.29 million, although lower than the previous session’s P737.38 million.

There was an equal number of advancers and decliners at 98, while 49 names were unchanged.