PSEi rebounds with softer inflation print

MANILA, Philippines – Philippine shares went green on Friday as investors welcomed a slower-than-expected inflation readout, raising hopes that the Bangko Sentral ng Pilipinas (BSP) may have more room to ease monetary policy in the coming months.

The benchmark Philippine Stock Exchange Index 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. It came in below both the BSP’s 7.1- to 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.

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. Mining and oil stocks suffered the biggest decline, shedding 1.10 percent. INQ