Stocks rose for a second day on expectations the Bangko Sentral ng Pilipinas will take a pause in its monetary tightening cycle on easing inflation.
The PSE index, the 30-company benchmark, gained 46 points, or 0.70 percent, to close at 6,635.11 Wednesday as four of the six subsectors advanced, led by property.
The broader all-shares index went up 14 points, or 0.41 percent, to sette at 3,533.84 on a value turnover of P4.34 billion. Losers outnumbered gainers, 97 to 93, while 41 issues were unchanged.
Eight of the 10 most active stocks ended in the green, led by GT Capital Holdings Inc. which rose 2.41 percent to P507.00 and Ayala Corp. which picked up 2.09 percent to P684.00.
The peso closed at 56.2 against the US dollar Wednesday, down from 56.03 Tuesday on the pronouncements by BSP Governor Felipe Medalla that the cooling inflation gives monetary authorities reason to pause the tightening cycle.
A narrowing differential between the US and Philippine interest rates weighs down on the local currency.
Meanwhile, Asian markets were mixed as unease over the slow progress of US debt talks further dampened sentiment, though Japanese stocks got a boost from forecast-beating economic growth data.
Regional traders were provided a tepid lead from Wall Street, where disappointing retail sales data and weak earnings from Home Depot indicated softening consumer demand.
But analysts said the readings were unlikely to give the Federal Reserve room to pause its interest rate hikes yet.
All eyes are on Washington, where lawmakers remain deadlocked in negotiations to lift the country’s borrowing limit to pay its debts and avert a market-rattling default.
US President Joe Biden met Republican House Speaker Kevin McCarthy and other congressional leaders at the White House on Tuesday after saying staff-level talks had produced no shift.
McCarthy told reporters there was still “a lot of work to do” before the country runs out of cash, which the Treasury has warned will happen around June 1.
However, there was a sliver of light as he said he ultimately expected a deal.
“America is the number one economy in the world. And when we get done with these negotiations, America’s economy is going to be stronger,” McCarthy said.
And the White House said Biden was “optimistic that there is a path to a responsible, bipartisan budget agreement if both sides negotiate in good faith”.
In a bid to get an agreement over the line, the president — who flies to Japan on Wednesday for a G7 summit — scrapped subsequent stops in Papua New Guinea and Australia, instead planning to return to Washington on Sunday.
Still, investors remain nervous about the possibility of a default, which many economists warn would send shivers through the world economy. With AFP