The local stock barometer rallied to the 7,500 level on Thursday as the global community is seen better coping with the novel coronavirus (2019-nCoV) contagion.
The main-share Philippine Stock Exchange index (PSEi) racked up 153.66 points or 2.09 percent to close at 7,506.51 ahead of the Bangko Sentral ng Pilipinas (BSP)’s latest monetary-setting.
As widely expected by the market, the BSP reduced its overnight borrowing rate by 25 basis points on Thursday. Earlier during the day, at a forum with the Management Association of the Philippines, BSP Governor Benjamin Diokno said he was committed to reduce the key overnight policy rates by a sum of 50 basis points this year.
All counters ended higher at the local market, led by the interest rate-sensitive property counter, which rose by 3.95 percent.
The financial, industrial, holding firm and services counters all firmed up by over 1 percent.
Value turnover for the day amounted to P7 billion. There was P1.42 billion worth of net foreign buying for the day.
Joseph Roxas, president of local stock brokerage Eagle Equities Inc., said local stocks moved in line with rebounding US markets.
“It looks like the mortality rate [from coronavirus] is going down,” he said, adding that the decline in fuel prices would also bode well for the domestic economy.
“Latest [BSP] cut is preemptive on concerns of a growth slowdown due to the nCoV. We think the BSP still has enough policy space left and will not be afraid to inject more stimulus should the need warrant it,” said Robert Dan Roces, chief economist at Security Bank.
Roces said improved liquidity levels and loan growth had provided a catalyst for the BSP to unwind from the 2018 rate hikes, with the cut “providing a nudge to counter a slowdown from the virus.”
There were 115 advancers that beat 70 decliners, while 46 stocks were unchanged.
The market was led by index heavyweight SM Prime, which surged by 5.93 percent. Utility Meralco also advanced by 5.9 percent.
PLDT rose by 4.1 percent while Ayala Land and GT Capital both rose by over 3 percent, while Metrobank gained nearly 3 percent. Ayala Corp. added 2.15 percent, while BDO rose by 1.59 percent. Puregold, ICTSI and BPI all slightly gained.
On the other hand, Metro Pacific, Megaworld and Bloomberry all slipped.