Manila: Hopes for further reduction in the Bangko Sentral ng Pilipinas' (BSP) key rates partially boosted the Philippine Stock Exchange index (PSEi), while the peso stood its ground against the US dollar on Wednesday. The local bourse's main index rose 1.01 percent to 6,210.66 points, and the All Shares increased by 0.60 percent to 3,728.61 points.

According to Philippines News Agency, all the sectoral gauges tracked the main index, led by the Services, which rose 1.90 percent. Mining and Oil followed with a jump of 1.47 percent, along with the Financials gaining 1.02 percent; Holding Firms increased by 0.88 percent; Property edged up by 0.26 percent; and Industrial saw a rise of 0.16 percent. Volume reached nearly 7.5 billion shares, amounting to PHP10.01 billion. Advancers led decliners at 104 to 83, while 59 shares were unchanged.

Luis Limlinan, Regina Capital Development Corporation head of sales, commented that the market is positioning ahead of the Federal Reserve's decision, with sentiment influenced by Finance Secretary Ralph Recto's recent remarks suggesting the BSP may cut rates if the Fed does. With inflation still within the target range, a Fed cut could potentially trigger the BSP to ease further later this year. The Federal Open Market Committee (FOMC) is expected to announce a cut after its two-day meeting ending September 17.

The rate of price increases averaged at 1.7 percent in the first eight months of this year, within the central bank's 2 to 3 percent target band for this year. This comes even as inflation posted an uptick to 1.5 percent last August from 0.9 percent the previous month, the lowest since October 2019.

The manageable domestic inflation rate has given the central bank leeway to cut rates for a total of 75 basis points as of last August, reducing the target reverse repurchase rate to 5 percent, the lowest since November 2022. This development also influenced the foreign exchange market, allowing the local currency to end the trade at 56.89 from its previous close of 56.91. It opened the day at 56.8 and traded between 56.75 and 56.94, with an average for the day standing at 56.86. Volume reached USD1.49 billion, lower than the previous day's USD1.95 billion.