The local stock market sustained its upward momentum Tuesday as investors welcomed the better-than-expected inflation rate data.
The 30-company Philippine Stock Exchange index gained 53.29 points, or 0.88 percent, to close at 6,131.32, while the broader all-shares index rose 18.19 points, or 0.55 percent, to settle at 3,310.34.
China Bank Capital managing director Juan Paolo Colet said index continued its rebound as the low October inflation boosted expectations the Bankgo Sentral ng Pilipinas would not implement a rate hike for the remainder of the year.
“Nonetheless, daily value turnover was relatively low as some market participants opted to stay on the sidelines ahead of the release of third quarter GDP [gross domestic product] data on Thursday,” Colet said.
Inflation in October cooled to a three-month low of 4.9 percent from 6.1 percent in September on slower increases in the prices of food and nonalcoholic beverages.
Meanwhile, the peso closed lower at 56.11 against the US dollar Tuesday from 55.91 Monday.
Jeff Ng, head of macro strategy for Asia at Sumitomo Mitsui Banking Corp. (SMBC), said he expects the peso-dollar exchange rate to be somewhat more stable over the coming 12 months. He said the local currency is expected to remain below 57.00 in the near-term, moving lower to 55.75 by end-2024.
“BSP may maintain a neutral-to-hawkish stance in its ‘live’ meeting on 16 November. This comes after an off-cycle benchmark rate hike [by 25bps to 6.50 percent] on 26 October. BSP saw it necessary to keep policy settings tighter for longer and is prepared for follow-through policy action. However, a weaker-than-expected CPI print may reduce the likelihood of more tightening in the near-term,” Ng said.
