PHL stocks surge on strong data before Fed meet

PHILIPPINE STOCKS continued to rally on Tuesday amid strong economic data and growing expectations of an outsized rate cut by the US Federal Reserve this week.

The benchmark Philippine Stock Exchange index (PSEi) increased by 1% or 71.16 points to end at 7,175.36 on Tuesday, while the broader all shares index surged by 0.79% or 30.17 points to close at 3,850.17.

This was the PSEi’s highest close in over 29 months or since it ended at 7,203.47 on March 31, 2022. Year to date, the main index is now up by 11.25% or 725.32 points from its end-2023 close of 6,450.04.

“The local market extended its gains this Tuesday. Investors showed appreciation for the July cash remittances data and the Board of Investments’ (BoI) approved investment pledges as of Sept. 16, both of which have shown good figures,” Philstocks Financial, Inc. Senior Research Analyst Japhet Louis O. Tantiangco said in a Viber message.

Cash remittances climbed by 3.1% to $3.085 billion from $2.992 billion a year ago, Bangko Sentral ng Pilipinas (BSP) data showed. This was the highest monthly level since the $3.28 billion recorded in December 2023.

Meanwhile, the BoI has approved 225 investment pledges worth P1.35 trillion this year, already surpassing 2023’s total, it said on Monday.

“Hopes of a dovish monetary policy outlook for both the Federal Reserve and the BSP also helped in keeping the market’s upward movement,” Mr. Tantiangco said.

“The local bourse extended its rally… as optimism grew around an expected rate cut from the Federal Reserve following tomorrow’s policy meeting,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

Markets are now pricing in a 67% chance that the Fed could ease rates by half a percentage point at the conclusion of its Sept. 17-18 monetary policy meeting, after a slew of media reports revived the prospect of more aggressive easing, Reuters reported.

Most sectoral indices closed higher on Tuesday. Holding firms went up by 1.84% or 111.20 points to 6,133.17; property rose by 1.48% or 42.11 points to 2,879.67; industrials climbed by 1.39% or 131.17 points to 9,560.68; mining and oil increased by 1.22% or 98.37 points to 8,103.18; and financials added 0.77% or 16.82 points to end at 2,199.91.

Meanwhile, services fell by 0.76% or 16.91 points to 2,208.50.

“Ayala Corp. led the index members, jumping 4.1% to P660. Converge ICT Solutions, Inc. was at the bottom, falling 2.89% to P16.14,” Mr. Tantiangco said.

Value turnover surged to P6.69 billion on Tuesday with 712.81 million issues switching hands from the P3.96 billion with 724.3 million shares traded on Monday.

Decliners outnumbered advancers, 117 versus 94, while 41 names closed unchanged.

Net foreign buying climbed to P806.45 million on Tuesday from P158.29 million on Monday. — R.M.D. Ochave with Reuters