MANILA -- Bargain hunting ended Philippine Stock Exchange index’ (PSEi) five-day slide Friday and the peso improved again against the US dollar following the below-expected domestic inflation rate in September 2019.
The main equities index rose 2.11 percent, or 159.05 points, to 7,704.60 points, which BPI Research attributed to the report of the slower service sector in the US.
This, after the ISM non-manufacturing index, a gauge of service sector activity, posted a 52.6 figure from 56.4 last month. Market expectations are for the index to be at 55.
With the weak economic data from the US, investors focused their eyes on local stocks, thus, the positive close of all the counters in the local bourse.
All Shares posted a 1.56 percent uptick, or 71.59 points, to 4,675.60 points.
Financials increased by 3.03 percent and was trailed by the Property, 2.91 percent; Mining and Oil, 2.05 percent; Holding Firms, 1.58 percent; Industrial, 1.34 percent; and Services, 0.53 percent.
Volume reached 430.38 million shares amounting to PHP5.08 billion.
Gainers led losers at 112 to 60 while 46 shares were unchanged.
Regina Capital managing director Luis Limlingan said the lower-than-expected inflation rate last September, which slid further to 0.9 percent from month-ago’s 1.7 percent, is a major contributor to the recovery of the main equities index.
Average inflation to date stood at 2.8 percent, below the mid-point of the government’s 2 percent to 4 percent target band until 2021.
Market participants and economists forecast inflation to slow to 1.2 percent in the ninth month this year.
“With inflation falling below consensus estimates, and the probability of US rate cut increasing, investors finally turned into bargain hunters to end the last trading session for the week,” Limlingan said.
Limlingan also cited that “investors bet that signs this week of a slowing economy will prompt the Federal Reserve to lower interest rates for the third time this year at its late October meeting.”
To date, the Fed has cut its key rates by 50 basis points to 1.75 percent to 2 percent to address the impact of the trade tensions on the expansion of the world’s largest economy.
Relatively, the local currency ended the week at 51.73 from 51.815 Thursday.
It opened at 51.7, a jump from the 51.97 start in the previous session.
It traded between 51.77 and 51.65, resulting in an average of 51.708.
Volume totaled to USD1.12 billion from USD1.19 billion a day ago.
The currency pair is seen to trade between 51.60 and 52 on Monday. (PNA)
