MANILA, Philippines – Local stocks snapped a losing streak on Friday as investors welcomed a slower-than-expected inflation report, raising hopes for possible easing of monetary policy by the Bangko Sentral ng Pilipinas (BSP).

The benchmark Philippine Stock Exchange Index (PSEi) climbed 0.45 percent or 26.45 points, to close at 5,938.38, recovering from recent weakness as sentiment improved following the release of May inflation data.

READ: Inflation slows to 6.8% in May

According to Philstocks Financial Inc., the market drew support from the latest inflation reading of 6.8 percent, which came in below both the BSP’s 7.1-7.9 percent forecast range and April’s 7.2 percent pace.

The softer inflation figure strengthened expectations that the central bank could adopt a less aggressive policy stance moving forward, providing a boost to risk assets such as equities.

Luis Limlingan, head of sales at Regina Capital Development Corp., said improved price data encouraged selective buying as confidence in the near-term outlook strengthened.

“Overall market participation reflected a cautiously optimistic tone amid easing inflation pressures,” Limlingan said.

Tentative participation

Despite the gain, trading activity remained subdued as investors stayed on the sidelines while assessing the outlook for interest rates and economic growth.

Net value turnover reached only P6.05 billion, reflecting cautious participation.

Foreign investors remained sellers, with net outflows amounting to P103.73 million.

Sectoral performance was mixed. Industrials posted the strongest gain, advancing 0.68 percent, while mining and oil stocks suffered the biggest decline, shedding 1.10 percent.

Among index members, ACEN Corp. emerged as the session’s top performer, soaring 11.29 percent to P3.45.

DMCI Holdings Inc., meanwhile, was the biggest laggard after falling 2.18 percent to P8.98.

Analysts said the market’s rebound came after months of volatility driven by concerns over inflation, interest rates and geopolitical risks.

Investors have been closely watching economic indicators for clues on the BSP’s next policy move, with easing price pressures seen as a potential catalyst for improved market sentiment.

For now, the latest inflation data has given the market a reason to cheer, but analysts said sustained gains will likely depend on further evidence that price pressures are easing and that monetary conditions can become more supportive of economic growth. /pai INQ