Dovish Fed prompts PSEi jump near 7,900

The local stock barometer started the week on an upbeat mood, tracking a global rally on Monday as investors bet on a dovish rhetoric from the US Federal Reserve.

The main-share Philippine Stock Exchange index (PSEi) racked up 74.74 points or 0.96 percent to close at 7,873.02, supported by some P406.7 million in net foreign buying.

“Asian equities pulled ahead (Monday) on the growing speculation that the US Federal Reserve will sound dovish at its policy meeting this week,” said Christopher Mangun, research head at local stock brokerage Eagle Equities Inc.

Now hovering close to the 7,900 resistance level, the PSEi could pull back tomorrow, Mangun said. But if the PSEi could break above 7,900, he said the market could turn bullish.

Meanwhile, ING economist Nicholas Mapa said it was possible the Bangko Sentral ng Pilipinas may announce a cut in the reserve requirement during the monetary setting on Thursday. This was meant to address tightening local monetary conditions, he said.

The PSEi was led higher by the holding firm, mining/oil and property counters, which all surged by over 1 percent.

The financial and industrial counters also gained.

On the other hand, the services counter slipped.

Value turnover was thin at P5.32 billion.

There were 94 advancers that edged out 93 decliners, while 54 stocks were unchanged. —DORIS DUMLAO-ABADILLA