BSP assurance, looser curbs pump up PSEi

MANILA, Philippines — Stocks bounced back yesterday, bucking the downtrend in Asia, as an expected loosening of COVID restrictions and a likely retention of the central bank’s policy rates outweighed geopolitical risks overseas.

“The index recouped its losses from last Friday’s selloff after Bangko Sentral ng Pilipinas Governor Benjamin Diokno reaffirmed that the BSP will maintain its accommodative stance as local inflation remains benign,” AB Capital Securities said in a note.

Monetary authorities will meet on Feb. 17 to set its benchmark interest rate, which has been kept at a record low of two percent since November 2020.

The 30-company Philippine Stock Exchange index (PSEi) rose 1.25 percent or 90.79 points to end at 7,361.15, while the broader All Shares index gained 0.54 percent or 20.81 points to close at 3,892.94.

“Monday’s rise is seen to reflect investors’ hopes that the country’s COVID-19 situation will continue to improve, eventually leading to a further easing of restrictions,” Philstocks Financial analyst Japhet Tantiangco said.

“Chartwise, the PSEi bounced from its 50-day exponential moving average, and closed back above the 7,300 level, which is seen as a support,” he said.

Market breadth was negative, 113 to 85, while 48 issues were unchanged.

Markets have gone on the defensive due to rising tensions over Ukraine, with risk-sensitive Asian markets seeing outflows towards safe-haven assets such as the dollar and gold.

“With US intelligence assessments estimating a possible full-scale invasion by Russia into Ukraine soon, ongoing geopolitical developments are likely to keep investors on edge this week and prop up safe haven demand for the dollar,” analysts from MUFG Bank said in a research note.