The Philippine Stock Exchange Index (PSEi) climbed 49.01 points, or 0.78 percent, to 6,353.04 on Wednesday, while the peso strengthened by 20.4 centavos to P61.41 against the US dollar from Tuesday’s P61.614.

The local bourse rebounded on bargain hunting after the previous session’s decline, with investor sentiment further lifted by Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona Jr.’s remarks that the central bank is unlikely to pursue aggressive monetary tightening.

Small chance

The BSP chief told reporters on Tuesday that there was still a small chance of a massive 50 basis point hike at the Monetary Board’s upcoming meeting next month. The central bank has hiked rates twice in response to accelerated inflation induced by the Gulf conflict, which may come at the expense of long-term economic growth.

Trading relatively muted

Trading remained relatively muted at P6.03 billion as investors awaited the US Federal Reserve’s policy decision and monitored geopolitical developments in the Middle East. Foreign investors provided strong support, posting net inflows of P657.58 million.

Market breadth was broadly positive, with five of the six sectoral indices ending higher. Holding Firms led the gains, rising 2.72 percent on strength in conglomerate stocks, while Mining and Oil was the lone decliner, slipping 0.73 percent as commodity-related shares consolidated after recent gains.

Aboitiz Equity Ventures emerged as the top performer among index heavyweights, while Converge ICT Solutions was the biggest loser after retreating from the previous session’s rally.

Strongest finish

The peso posted its strongest finish in several sessions, supported by sustained foreign fund inflows into Philippine equities, a softer US dollar ahead of the Federal Reserve’s policy announcement, and easing demand for safe-haven assets as geopolitical tensions in the Middle East remained contained.

Investors also welcomed Remolona’s remarks, which reinforced expectations that domestic inflation remains manageable and that interest rates may stay supportive of economic growth.