Stocks end week higher on dovish BSP stance

MANILA, Philippines — The stock index yesterday closed higher for the fourth straight day after the Bangko Sentral ng Pilipinas (BSP) looked past increasing inflation pressures to keep its monetary policy loose.

Traders said the rally was also fueled by the dovish stance of the US Federal Reserve to keep rates steady and hint of  a tapering of its bond buying spree.

The benchmark Philippine Stock Exchange index (PSEi) gained 36.25 points or 0.52 percent to finish at 6,951.53, while the broader All Shares barometer added 21.14 points or 0.49 percent to end at 4,323.64.

Total value turnover reached P8.9 billion. Market breadth was positive, 103 to 79, while 67 issues were unchanged.

“Philippines shares extended their gains after the US Federal Reserve offered no surprises. The officials penciled in at least one interest rate hike next year. Moreover, they could discuss the pace at which they would taper the Fed’s bond-buying program by the November meeting. The investors’ worries over Evergrande’s debt troubles also abated. As the third quarter comes to a close, the next earnings season will grab the investors’ attention next. Back home, the results of the Monetary Board meeting were also in line with the market’s expectations. The RRP, deposit, and lending rates are still at two percent, 1.5 percent, and 2.5 percent, respectively. The BSP expects inflation to remain beyond the target band during the policy horizon,” said Luis Limlingan of Regina Capital.