The local stock barometer yesterday firmed up to the 7,300 level as investors anticipated a fresh 50-basis point interest rates hike by the Bangko Sentral ng Pilipinas to curb inflation expectations.
The main-share Philippine Stock Exchange index (PSEi) recouped 52.38 points or 0.72 percent to close at 7,320.59 ahead of the BSP’s monetary setting announcement.
As widely expected, the BSP raised key interest rates by 50 basis points. Overnight, the US Federal Reserve also raised its key rates by 25 basis points.
“Moving to expectations may see us move back to the breakdown point of 7,478 on confirmed confidence in the BSP and to anticipate the quarter-end window dressing,” Papa Securities said in a research note.
Although inflation is expected to slow down in the fourth quarter, ING economist Joey Cuyegkeng said the BSP might still be called to enact another round of rate hikes as inflation expectation remained elevated going into 2019.
“Thus it will be imperative for nonmonetary policy measures to help alleviate prices pressures as we approach the all-important Christmas season, a crucial turning point ahead of the midterm election in May,” Cuyegkeng said.
Barring any additional calamities, both natural and man-made, ING expects inflation to revert to within-target levels toward the latter half of 2019.
Yesterday, the PSEi was supported mostly by domestic inventors while foreign investors remained net sellers to the tune of P520.5 million.
The index was boosted by the holding firm and property counters, which both gained over 1 percent, while the services index also firmed up.
On the other hand, the financial, industrial and mining/oil counters all slipped.
Total value turnover for the day amounted to P5.05 billion. There were 101 decliners that edged out 85 advancers while 45 stocks were unchanged.
The PSEi was boosted by gains posted by Globe Telecom, which surged by 6.49 percent.
SM Investments, Metro Pacific, Ayala Land and BDO all gained over 1 percent, while URC, GT Capital and JG Summit also firmed up.
A notable gainer outside the PSEi was IRC, proponent of the Makati subway system project.
PLDT—the day’s most actively traded company—tumbled by 4.76 percent.