Manila: The upgrade of the Philippines to an upper middle-income economy lifted investors' sentiment, further boosting the Philippine Stock Exchange index (PSEi) Thursday and helping the Philippine peso recover against the greenback.

According to Philippines News Agency, the World Bank (WB) reported that the broad-based expansion of the domestic economy increased its gross national income (GNI) per capita to USD4,850, surpassing the USD4,636 threshold. This development has had a positive impact on the local financial markets.

The local bourse's main index rose 0.93 percent to 6,125.72 points, reflecting investor optimism. Additionally, the broader All Shares index climbed 0.55 percent to 3,343.03 points. Most sectoral gauges also experienced gains, with Mining and Oil leading the charge by rising 2.45 percent. It was closely followed by Services, Financials, Holding Firms, and Property, which increased by 1.16 percent, 0.93 percent, 0.82 percent, and 0.80 percent, respectively. However, the Industrial index showed a slight decline, down by 0.11 percent.

Aside from the impact of the WB report, Philstocks Research highlighted that the local market also gained support from the slight improvement in the S and P Global Philippines' Manufacturing PMI (Purchasing Managers' Index), which increased from 50.8 to 50.9 in June. An index above 50 indicates expansion, signaling positive momentum in the manufacturing sector.

The positive sentiments in the local equities market also benefited the local currency. The Philippine peso gained against the US dollar after several days of decline, ending the day's trade at 61.56, up from the previous session's 61.62. Despite starting the day weaker at 61.60, the peso traded between 61.65 and 61.53, bringing the day's average to 61.59. However, trading volume decreased to USD1.27 billion from Wednesday's USD1.58 billion, reflecting a cautious yet optimistic market environment.