Market surges on Wall St rally, hopes of rate cut
Share prices surged to a two-month high yesterday, propelled by Wall Street’s rally overnight and expectation the Bangko Sentral ng Pilipinas (BSP) will cut key rates.
The 30-company Philippine Stock Exchange Index rose 79.27 points, or 2.2 percent, to 3,677.19 – its highest close since July 24.
The market has risen 12 percent since mid-September, breaking several resistance levels.
“This is in anticipation of a central bank rate cut,” said Unicapital Securities research head Ron Rodrigo, referring to a rate-setting meeting tomorrow. “We may continue to rise given the overall positive outlook, although there will be investors who will take this as a selling opportunity.”
Ayala Corp., the
Metropolitan Bank & Trust Co., the country’s largest lender, was up 2.7 percent at P57.50.
Philippine Long Distance Telephone Co. (PLDT) inched up 1.2 percent at P2,940 after touching a new record high of P2,970, following hefty gains of its American depository receipts Monday. Rival Globe Telecom Inc. rose 4.1 percent to P1,520 after briefly hitting a record high P1,535.
Gainers outnumbered losers 90 to 36, while 51 stocks ended unchanged.
“Property and banking stocks have been receiving a boost from the expected rate cut on Thursday,” said Lawrence de Leon of Accord Capital Equities.
“We’ve also seen several regional markets posting record levels and it’s also helping push our market higher, although we have probably hit the ceiling at around 3,700 points.”
The Philippine central bank will meet on Thursday to decide on interest rates, with some economists betting policymakers will slash key interest rates by 25 basis points given tame inflation and the Federal Reserve’s aggressive half-point rate cut last month.
“Hints that the third-quarter gross domestic product might surprise with better-than-expected numbers again are also keeping the buying momentum intact,” said Francisco Liboro of PCCI Securities.
SM Investments Corp., the second biggest, rose P12.50 – P380.
In the property sector,
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