THE peso and stock market rebounded on Thursday with sentiment said to have risen following a jumbo rate cut by the US Federal Reserve (Fed).
The currency strengthened by 11 centavos to P55.61 against the dollar, while the benchmark Philippine Stock Exchange index (PSEi) added 46.26 points, or 0.65 percent, to close at a two-and-a-half-year high of 7,202.16.
The broader All Shares also rose, by 0.62 percent, or 23.72 points, to 3,871.68.
The peso opened trading at P55.88:$1 and ranged from P55.56 to P55.92. Volume climbed to P1.993 billion from P1.229 billion a day earlier.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the peso strengthened following the Fed move, which could prompt the Bangko Sentral ng Pilipinas to order another rate cut.
The PSEi’s gain also lifted the peso, he added.
Philstocks Financial Inc. senior research analyst Japhet Tantiangco, meanwhile, said “investors positively accepted the Federal Reserve’s 50 basis points policy rate cut, which is expected to give a big boost to the US’ economy.”
“In addition, the market cheered the Bangko Sentral ng Pilipinas’ plan to cut banks’ reserve requirement ratios substantially this year,” he added.
Tantiangco noted that the trading was strong with net value turnover at P7.86 billion, higher than the year-to-date average of P5.05 billion.
“Foreigners were still net buyers with net inflows amounting to P5.05 billion,” he added.
Regina Capital Development Corp. Managing Director Luis Limlingan said the PSEi was “buoyed by the Fed’s first rate cut in four years, lowering interest rates by 50 bps to a range of 4.75 to 5.00 percent.”
Except for the industrial index that dipped by 0.12 percent, all other sectors closed in the green with mining and oil up the most by 2.43 percent.
Gainers outnumbered decliners, 113 to 78, while 62 were unchanged.
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