THE local stock barometer on Thursday broke its three-day rally on last-minute profit-taking as wary investors were anticipating the outcome of the Bangko Sentral ng Pilipinas’ (BSP) Monetary Board’s rate-setting meeting yesterday.
Meanwhile, the Philippine currency slightly strengthened on Thursday, maintaining its level at P56:$1.
The benchmark Philippine Stock Exchange index closed 12.05 points, or 0.18 percent, at 6,692.91.
The broader All Shares index lost 1.15 points, or 0.03 percent, to 3,628.15.
Japhet Tantiangco, senior research analyst at Philstocks Financial Inc., said there was a last-minute profit-taking in the market “as a cautious move while waiting for the BSP’s policy decision.”
Regina Capital Development Corp. Managing Director Luis Limlingan shared this view, saying that the market closed slightly lower “as local traders anticipated the BSP’s policy decision set for today (Thursday).”
“It was also just announced a few minutes ago, after closing, that rates would finally be reduced by 25 bps (basis points) after much speculation from the market,” Limlingan continued.
He noted that US stocks had rallied on Wednesday after the latest inflation report showed a “slowing annual inflation rate of 2.9 percent, the lowest level since 2021. This data, along with a key wholesale inflation metric released on Tuesday that came in below expectations, has boosted investor confidence in the likelihood of a soft economic landing,” he explained.
“As a result, market participants are increasingly optimistic that the Federal Reserve may cut interest rates at its September meeting,” he continued.
The service sector led gainers, adding 0.68 percent, while the mining and oil sector lost the most, dropping 1.11 percent.
Gainers edged out decliners, 103 against 98, while 47 were unchanged.
For its part, the peso strengthened by only a half-centavo to P56.955 against the greenback from the previous level of P56.96, data from the Bankers Association of the Philippines showed.
This is still the strongest close since April 15, when the peso ended at P56.808 to the dollar.
It opened trading at P56.9:$1 and ranged from P56.835 to P57.12.
Volume reached P1.338 billion, lower than the P1.797 billion recorded in the previous session.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that the peso strengthened as the US dollar’s value against major global currencies declined anew.
“The peso exchange rate was also marginally stronger vs. the US dollar ahead of the upcoming rate-setting meeting of the BSP,” he added.
Ricafort said he was expecting the central bank to order a 25-basis-point cut Thursday, already mostly anticipated by a majority of Philippine analysts and economists.
And as largely anticipated, the policymaking body of the BSP, the Monetary Board, announced Thursday a 25-basis-point cut in its target reverse repurchase rate to 6.25 percent, with BSP Governor Eli Remolona Jr. quoted as saying, “The interest rates on the overnight deposit and lending facilities were accordingly adjusted to 5.75 percent and 6.75 percent, respectively.” Earl John Alfaro,
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