MANILA, Philipines — Early gains in the local stock market were erased by the closing bell on Thursday, as traders absorbed the US Federal Reserve’s decision to keep interest rates unchanged, a move expected to be mirrored by the Bangko Sentral ng Pilipinas (BSP).
The benchmark Philippine Stock Exchange Index (PSEi) slipped to the 6,300 level as it shed 0.30 percent, or 19.24 points, to close at 6,390.83.
The broader All Shares Index, meanwhile, was flat as it went down by 0.20 percent, or 7.05 points, to 3,443.
A total of 289.83 million shares worth P4.95 billion changed hands, stock exchange data showed.
Investors were initially fueled by “better-than-expected” inflation print in the United States, resulting in the PSEi’s intraday high of 6,446.06, up by 0.56 percent from the previous closing.
READ: US inflation cooled in May in a sign that price pressures may be easing
However, the American central bank’s announcement that it may have room for only one rate cut this year doused hopes, with last-minute sell-offs pulling the market down.
Alfred Benjamin Garcia, research head at AP Securities Inc., said that while the market was hoping “a clearer path to Fed rate cuts would embolden” the BSP to cut rates earlier, “smaller cuts in the US would likely translate to a similar reduction in rate cuts locally.”
At the same time, President Marcos’ comment that inflation remained a concern locally “due to uncontrollable forces” further tempered rate cut hopes, said Mikhail Plopenio, researcher at Philstocks Financial Inc.