Slower US inflation pushes PSEi past 7,000 mark

After one and a half years, the local bourse finally broke through the 7,000 barrier—a level that has been elusive in the past month—after inflation in the United States eased to its slowest in more than three years, igniting hopes for a rate cut.

The benchmark Philippine Stock Exchange Index (PSEi) on Thursday gained by 1.15 percent, or 79.79 points, to 7,024.67, its highest closing value since Feb. 3, 2023.

Meanwhile, the broader All Shares Index added 0.68 percent, or 25.44 points, to 3,791.65.

READ: US consumer inflation eases more than expected in August

A total of 1.05 billion shares worth P5.46 billion changed hands as foreigners made net purchases worth P348.48 million, stock exchange data showed.

The bourse’s record closing price this year came after the US inflation fell to its lowest level since February 2021, said Alfred Benjamin Garcia, research head at stock brokerage house AP Securities Inc.

Investors have long been on their toes while waiting for the latest inflation print in the United States, as this will be the key driver of the Federal Reserve’s (Fed) monetary policy stance.

“We’re fairly confident that the index will be able to hold above this level, especially with some corporate fundamentals and macroeconomic indicators looking good so far,” Garcia said in a Viber message.

For weeks, the PSEi has tried and failed to close above 7,000 due to profit-takers taking advantage of winning streaks, as well as prolonged uncertainty over the American central bank’s next move.

In general, the Bangko Sentral ng Pilipinas mirrors the Fed’s move, spurring investor interest and consumer spending.

Juan Paolo Colet, managing director at investment bank China Bank Capital Corp., noted that should the market sustain this level in the next few days, it may attempt to move past its next resistance level at 7,100.

All sectors ended in the green, with property firms—expected to benefit from rate cuts—seeing the steepest gain at 1.4 percent. —Meg J. Adonis