Index rallies on BSP decision to raise rates

Market investors were back with a vengeance, cheering the Bangko Sentral ng Pilipinas’ move to raise interest rates on Thursday to quell inflation.

The benchmark Philippine Stock Exchange index (PSEi), the stock market gauge, rallied 1.88 percent, or 130.75 points, to finish at 7,083.34.

Similarly, the broader AllShares index gained 55.65 points or 1.30 percent to finish at 4,310.52.

All the other indices were up except for the mining and oil which finished in the red.

Total value turnover was robust too at P9.912 billion. Market breadth was positive, 115 to 65 while 47 issues were left unchanged.

Commenting on yesterday’s market session, Gabriel Perez of Papa Securities said the BSP’s rate hike “was well received by the market.”

The BSP raised rates by 25 basis points to address inflation which was at 6.7 percent in September and October from 6.4 percent in August.

“Total value turnover was notably significant as well at P9.9 billion, meaning that there was a lot of strength behind today’s push. Net foreign selling was present, but noticeably low at only P149 million,” Perez said.

“Let’s hope the positivity pushes through to next week, more so with the above average value turnover behind yesterday’s move. Initial resistance for the PSEi should be around the 7,270 levels near its recent highs,” he said.

Yesterday also saw the completion of third quarter earnings with most companies reporting better than expected results.