The Philippine Stock Exchange index (PSEi) finally entered “bull territory” or 7,000 points on Thursday, marking the first time the stock index returned to that level since Feb. 3, 2023.

The PSEi’s close of 7,024.67 points on Thursday was also the highest for the year, surpassing the 6,984.63 last Tuesday. The previous high was 6,979.81 points logged on April 1.

Analysts said that the three-year-low headline inflation in the United States pushed the PSEi to gain 1.15% to close at 7,024.67.

“The local bourse took cues from Wall Street’s overnight rise driven by the decline in the US’ headline inflation last August,” Philstocks Financial research manager Japhet Tantiangco said.

US inflation in August settled at 2.5 percent, the lowest in over three years.

This improved investors’ sentiment as the Federal Open Market Committee (FOMC) of the US Federal Reserve is more likely to cut key rates in its meeting from September 17 to 18. The key policy rate in the US is current 5.25% to 5.5%.

Also, a rate cut by the US Fed will likely prompt the Bangko Sentral ng Pilipinas (BSP) to do the same when its Monetary Board meets in October and December.

The current policy rate of the BSP is 6.25%. To recall, it reduced policy rates by 25 basis points after the its Monetary Board met on August 15.

Meanwhile, the FOMC of the US Fed has two more meetings this year, and is expected to undertake two more rate cuts.

However, the positive outcome of the August US inflation rate also strengthened the US dollar against the Philippine peso.
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The peso weakened on Thursday to P56.20 to a US dollar from last day’s close of P55.98.