THE stock exchange rose to its highest so far for the year on Monday, buoyed by favorable economic data and prospects of a US Federal Reserve rate cut, even as the peso plunged back to the P56:$1 level.
The benchmark Philippine Stock Exchange index (PSEi), which hit an intraday high of 7,025.46, pared back gains late in the session to end the day 48.16 points or 0.69 percent higher at 6,984.25.
The broader All Shares index also gained, adding 25.19 points or 0.67 percent to end the day at 3,778.05.
The day’s results bucked declines elsewhere in the region amid worries that weak US economic data could lead to a recession in the world’s largest economy.
Philstocks Financial Inc. senior research analyst Japhet Tantiangco said the PSEI’s climb was due to “investors cheer[ing] the prospects of further rate cuts by the Bangko Sentral ng Pilipinas.”
“This comes on the back of the favorable inflation figures seen for August and the increasing likelihood of the [US] Federal Reserve starting with their monetary easing in their policy meeting next week,” he added.
Regina Capital Development Corp. Managing Director Luis Limlingan, meanwhile, said “investors continued to buy into the local market with many expecting foreign fund flows to increase given the strong economic data in the country vs the rest of the region.”
“For this week, the key [US] economic data releases that investors will be eyeing include the CPI (consumer price index) report on Wednesday and the University of Michigan consumer sentiment report on Friday,” he said.
“With the Fed entering a blackout period ahead of the September 17-18 FOMC meeting, no comments on monetary policy are expected from officials,” Limlingan continued.
“On the local front, others will be closely watching the release of the Philippine Balance of Trade data on September 10 and the June FDI figures on September 12.”
Sector results were mostly higher, with financials leading gainers with a 1.36-percent rise. The industrial and mining and oil indices closed in the red, falling by 0.08 percent and 0.83 percent, respectively.
Decliners outnumbered gainers, 104 to 96, while 50 names were unchanged.
The peso, meanwhile, weakened by 61 and a half centavos to close at P56.52 against the dollar.
It opened at the day’s low of P56.2:$1 and traded as high as P56.52. Volume reached P1.215 billion, slightly lower than P1.505 billion in the previous session.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso weakened after the US dollar index, which tracks the dollar against major global currencies, corrected higher.
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