REUTERS

PHILIPPINE STOCKS edged higher on Thursday after the US Federal Reserve signaled two cuts this year and before the Bangko Sentral ng Pilipinas (BSP) delivered a second straight reduction in benchmark interest rates.

The benchmark Philippine Stock Exchange index rose by 0.3% or 19.58 points to close at 6,357.01, while the broader all shares index went up by 0.16% or 6.39 points to 3,779.18.

“Philippine shares closed moderately higher ahead of the BSP decision and right after the Fed held rates steady. The Fed committee also signaled two cuts this year, while warning of slower growth and higher inflation,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.

“The local market rose on expectations that the BSP would cut their policy rates in their Monetary Board meeting,” Philstocks Financial, Inc. Research Manager Japhet Louis O. Tantiangco said in a Viber message. “Investors are also looking forward to the two policy rate cuts that the Fed has projected for this year.”

Overnight, Fed policymakers held rates steady as expected and retained projections for two quarter-point rate cuts this year, Reuters reported.

However, Fed Chair Jerome H. Powell struck a cautious note about further easing ahead, saying at his press conference later that he expects “meaningful” inflation ahead as a result of US President Donald J. Trump’s aggressive trade tariffs.

Meanwhile, the BSP slashed its target reverse repurchase rate by 25 basis points (bps) to 5.25% at its policy meeting on Thursday, as forecasted by 15 out of 16 analysts in a BusinessWorld poll.

The Monetary Board has now reduced benchmark borrowing costs by 125 bps since it began its easing cycle in August last year. BSP Governor Eli M. Remolona, Jr. said they could deliver one more 25-bp cut this year, depending on the data.

The majority of the sectoral indices closed higher on Thursday. Financials went up by 1.08% or 25.01 points to 2,329.07; property climbed by 0.28% or 6.35 points to 2,252.37; industrials increased by 0.21% or 19.31 points to 9,169.59; and holding firms rose by 0.07% or 3.77 points to 5,418.92.

Meanwhile, mining and oil fell by 1.11% or 110.64 points to 9,789.05 and services went down by 0.26% or 5.88 points to 2,213.64.

“Emperador, Inc. led the index members, climbing 1.94% to P15.80. ACEN Corp. was at the tail end, falling 1.53% to P2.58,” Mr. Tantiangco said.

Value turnover went down to P4.43 billion on Thursday with 983.05 million shares exchanged from the P5.28 billion with 2.91 billion issues traded on Wednesday.

Decliners edged out advancers, 91 versus 90, while 57 names were unchanged.

Net foreign buying was at P353.15 million on Thursday, a turnaround from the P254.69 million in net selling recorded on Wednesday. — Revin Mikhael D. Ochave with Reuters