PSEi highest in more than 2 years after surprise Fed move

The US Federal Reserve’s (Fed) much-awaited, higher-than-expected rate cut on Thursday jolted the local bourse, enough for it to skip another crucial barrier after more than two years.

By the end of the session, the benchmark Philippine Stock Exchange Index (PSEi) added 0.65 percent, or 46.26 points, to 7,202.16. It last closed above 7,200 in March 2022.

Likewise, the broader All Shares Index gained by 0.62 percent, or 23.72 points, to close at 3,871.68.

READ: Federal Reserve signals end to inflation fight with half-point rate cut

Vigorous trading was also observed, with 698.27 million shares worth P8.16 billion changing hands, stock exchange data showed. This is higher than the year-to-date average of P5.05 billion, according to Philstocks Financial Inc.

Foreigners also helped pull the market up as they made net purchases worth P1.69 billion.

The PSEi’s performance came after the Fed announced a 50-basis-point (bp) interest rate cut, higher than the 25-bp pundits expected.

As a result, experts are predicting the Bangko Sentral ng Pilipinas would be making two more rate cuts this year. It began its easing cycle on Aug. 15, when it slashed the benchmark rate by 25 bps to 6.25 percent.

Among all the sectors, banks and property firms are expected to benefit the most from interest rate cuts as it would lower borrowing costs, thereby increasing demand for real estate.

International Container Terminal Services Inc. was the top-traded stock as it went down by 0.30 percent to P402.80 per share.

It was followed by Ayala Corp., up 1.12 percent to P678.50; BDO Unibank Inc., up 2.04 percent to P160.40; SM Investments Corp., down 0.10 percent to P964; and SM Prime Holdings Inc., up 1.85 percent to P33.

Other actively traded stocks were Universal Robina Corp., up 1.59 percent to P99.05; Bank of the Philippine Islands, up 2.07 percent to P128.20; Metropolitan Bank and Trust Co., up 1.48 percent to P75.40; Ayala Land Inc., up 0.14 percent to P36; and DigiPlus Interactive Corp., down 1.40 percent to P18.30 each.

Gainers outnumbered losers, 113 to 78, while 62 companies closed unchanged.