BSP rate cut fails to lift market

MANILA, Philippines — The local stock market has failed to mirror the optimism arising from another round of monetary easing, as investors turned their heads to economic risks that could crash the party.

The Philippine Stock Exchange index (PSEi) yesterday ended its two-day win run in a surprise turn of events, slipping by 0.26 percent or 19.31 points to land at 7,437, on the day that the Bangko Sentral ng Pilipinas (BSP) delivered another rate cut.

On the contrary, the broader All Shares index picked up by 0.27 percent, or 11.11 points, to close at 4,097.56.

Philstocks Financials Inc. research manager Japhet Tantiangco said the PSEi fell on what seems to be a big day due to the peso’s weakness in the currency market.

Tantiangco also pointed to the decline in Wall Street as another factor for the shock decline.

Markets mostly fell yesterday after a tech-led sell-off on Wall Street fuelled by worries about the sustainability of the AI rally, while oil prices clawed back some of the previous two days’ hefty losses.

Regina Capital Development Corp. managing director Luis Limlingan said risks abroad remain to be a headache for many investors. For one, it has yet to be seen when the geopolitical conflicts in the Middle East would end, and this is causing fluctuations in the oil market.

Further, the US Federal Reserve is uncertain on whether it should proceed with its rate-cutting cycle, and Fed Governor Christopher Waller on Monday flagged the risks of easing without caution.

Prior to yesterday’s trading, the PSEi was tracking a mini run, buoyed by consensus that the BSP would deliver another 25-basis -points cut, which it did as expected.

The PSEi saw P6.95 billion worth of shares change hands all throughout trading.

Losers edged winners, 101 to 86, while 75 issues stayed the same.