The benchmark Philippine Stock Exchange Index (PSEi) mounted a comeback on Thursday following a late-session rally as investors cheered the Bangko Sentral ng Pilipinas’ (BSP) surprise offensive against inflation.
From an intraday drop of 1.4 percent, the PSEi closed the session down 0.12 percent, or 7.24 points, to 6,248.13. The broader All Shares index closed lower by 0.22 percent, or 7.57 points, to 3,367.
Selling pressure emerged after the BSP announced an aggressive and unscheduled policy rate hike of 75 basis points. But stocks recovered toward the close as the move propped up the Philippine peso from a nearly two-decade low, ending higher by 0.2 percent to P56.15 against the greenback.
“One positive impact of the aggressive rate hike is that it shows that the BSP is putting its foot down as far as the depreciation of the peso is concerned given its potential implications on inflation,” April Lynn Tan, vice president, corporate strategy officer at COL Financial Group Inc., told the Inquirer.
Tan explained higher interest rates were typically not positive for the stock market but she said the “weak peso is now the focus given how sharply it has depreciated recently.”
Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said the policy rate hike was meant to stabilize the foreign exchange rate.
“This would also help better manage/anchor both actual inflation and inflation expectations,” he said.
US stocks extended losses overnight after June inflation shot up to a 41-year high of 9.1 percent.
Philippine Stock Exchange volume on Thursday moved higher with 680.4 million shares valued at P5.29 billion changing hands while net foreign selling climbed to P826.8 million.
Top losers
Property stocks were among the top losers following declines by Ayala Land Inc. and SM Prime Holdings. Holding firms, mining and oil and industrial shares sank while financials and services advanced.
Ayala Land was the top traded company as it lost 2.46 percent to P23.80 per share.
It was followed by SM Investments Corp., down 2.7 percent to P775.50; International Container Terminal Services Inc., up 2.02 percent to P186.50; Universal Robina Corp., down 1.54 percent to P115; and SM Prime Holdings Inc., down 0.54 percent to P36.70 per share.
BDO Unibank Inc. rose 2.59 percent to P123, followed by Ayala Corp., up 0.17 percent to P605; Metropolitan Bank & Trust Co., up 0.1 percent to P47.70; GT Capital Holdings Inc., down 4.97 percent to P440; and Semirara Mining and Power Corp., up 1.3 percent to P39 per share.
Overall, there were 124 losers against 69 gainers while 34 companies closed unchanged.