PSEi rallies, breaches 8,000 level

The local stock barometer sprang to the 8,000 mark on Wednesday on prospects of resumed US-China trade talks and dovish local central bank.

The main-share Philippine Stock Exchange index (PSEi) racked up 94.97 points, or 1.2 percent, to close at 8,017.01, tracking upbeat regional markets.

Investors took comfort from news that US President Donald Trump was set to meet with China President Xi Jinping next week at the G-20 Summit for “extended” trade talks.

Local stocks also rallied ahead of the monetary setting of the Bangko Sentral ng Pilipinas (BSP), where another rate cut was seen as a possibility.

In a research note, British bank Standard Chartered said the BSP might be dovish during its policy meeting today. It expects a rate cut of another 25 basis points, driven by soft inflation and subdued growth.

“Inflation picked up in May in the Philippines for the first time in eight months, against market expectations of a drop, but in line with our view of an increase. The May increase was likely a one-off, driven primarily by a low base in 2018. We expect inflation to drop below the bottom of BSP’s 2-4 percent inflation target. Declining inflation, subdued credit growth and a soft growth outlook are likely to support further easing from BSP,” Stanchart said.

Stanchart expects further rate cuts at BSP’s August and September meetings.

On Wednesday, the PSEi was led higher by the financial, holding firm, services and property counters, which all rose by over 1.38 percent.

Total value turnover for the day amounted to P7.3 billion.  There was a modest net foreign selling of P26.43 million.

There were 106 advancers that edged out 81 decliners, while 53 stocks were unchanged.

PLDT and GT Capital both advanced by over 4 percent, while SM Investments and Globe Telecom rose by nearly 3 percent.

Metrobank and Ayala Land went up by over 2 percent while BDO, Security Bank and Megaworld all added over 1 percent. SM Prime and Meralco also firmed up.

Outside of the PSEi, one notable gainer was ISM, which rose by 4.79 percent.

On the other hand, SMC fell by 1.85 percent while Puregold slumped by 1 percent. ICTSI and Jollibee also slipped.