MANILA — The inflation rate slowdown in June boosted the Philippine Stock Exchange index (PSEi), fueling expectations of another cut in central bank’s key rates, while the peso finished weaker ahead of the release of the United States’ June 2019 non-farm payrolls (US NFP) report.
PSEi rose to 8,117.94 points, up 0.66 percent or 53.02 points, which BPI Research attributed to the easing of inflation last June, at 2.7 percent from the previous month’s 3.2 percent.
The drop was attributed partly to the second consecutive slide of rice inflation as well as slower inflation of the education index due to the implementation of free tuition fee in state universities and colleges (SUCs).
“The PSEi crossed the 8100 level for the first time since February as BSP rate cut expectations rose given the lower inflation print for June,” BPI Research said.
BSP’s policy-making Monetary Board (MB) cut key policy rates by 25 basis points last May after inflation decelerated. It peaked at 6.7 percent in September to October last year.
The MB kept key rates steady last June, which BSP Governor Benjamin Diokno said was necessary to allow monetary authorities time to assess the impact of their earlier decisions.
Also, Regina Capital Managing Director Luis Limlingan, who projected June 2019 inflation at 2.7 percent, said investors’ sentiment got a major boost from the positive inflation report.
Thus, most of the counters tracked the main gauge.
All Shares improved by 0.28 percent, or 13.69 points, to 4,945.68 points.
Property posted the highest increase among the sectors with a rise of 0.91 percent and was trailed by the Holding Firms, 0.77 percent; Industrial, 0.70 percent; and Financials, 0.32 percent.
On the other hand, Mining and Oil fell 0.72 percent and Services by 0.22 percent.
Volume reached 759.24 million shares amounting to PHP5.5 billion.
Losers led gainers at 116 to 80 while 53 shares were unchanged.
On the other hand, the peso ended the week at 51.195 from the previous day’s 51.13, which a trader said was due to a wait-and-see stance pending the release of the US NFP report for June, along with forecasts of a 160,000 growth. Last May, NFP rose by 75,000.
For the day, the peso opened the day at 51.2, little changed from its 51.18 start Thursday.
It traded between 51.21 and 51.1, resulting to an average of 51.157.
Volume reached USD770.24 million, lower than day-ago’s USD775.7 million.
BPI Research forecast the local currency to trade between 51.00 and 51.30 on Monday.
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