Philippine Stock Exchange Index Advances Amid Bargain Buying While Peso Weakens

The Philippine Stock Exchange index (PSEi) continued its upward momentum on Thursday, buoyed by bargain hunting, as it rose 2.01 percent to close at 5,930.81 points. The broader All Shares index also gained 2.56 percent, settling at 3,335.02 points.

Most sectoral indices recorded positive performances, led by the Property sector, which surged 2.82 percent. This was followed by Financials at 2.64 percent, Holding Firms at 1.38 percent, Industrials at 1.22 percent, and Services at 1.13 percent. The only sector to experience a decline was Mining and Oil, which dropped 0.49 percent.

Trading volume reached 1.74 billion shares, with a total value of PHP15.69 billion. Advancing stocks outnumbered decliners 96 to 72, while 66 shares remained unchanged.

Luis Limlingan, head of sales at Regina Capital Development Corporation, attributed the index's rise to increased buying activity. He remarked, "The rally was fueled by renewed investor confidence following indications from the Bangko Sentral ng Pilipinas (BSP) suggesting further rate cuts before year-end. Additionally, the removal of agricultural tariffs and the government's intent to negotiate reductions on tariffs for non-exempt goods have positively influenced market sentiment."

Conversely, the Philippine peso weakened against the US dollar, closing at 59.06 to the dollar from the previous day's 58.93. Michael Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC), explained that the peso's depreciation partially reflected the strengthening US dollar after the release of the Federal Open Market Committee (FOMC) minutes from their October 28-29 meeting. The minutes indicated the Federal Reserve may hold interest rates steady for the remainder of the year due to labor market and inflation concerns.

The local currency traded in a range between 59.00 and 59.11 throughout the day, starting and ending near the upper bound. The total foreign exchange turnover declined to USD1.08 billion from USD1.39 billion reported the previous day.

Ricafort projected the peso's next key resistance level at 59.20, with initial supply pressure anticipated at 59.00.

These market developments underscore cautious optimism among investors, balancing favorable local policy moves with external factors influencing currency dynamics.