The local stock market surged after news that the US Federal Reserve will likely cut rates starting next year.

The main index shot up by 154.74 points or 2.47 percent to close at 6,410.48 as Conglomerates led the rally although the Services counter lagged behind.

Volume rose to 385 million shares worth P6.78 billion as gainers were double the number of losers at 120 to 59 while 44 were unchanged.

“Philippine shares rallied past the 6,400 mark following the unchanged benchmark rates by the Fed,” said Regina Capital Development Corporation Managing Director Luis Limlingan.

He added that, “investors cheered as the US Central bank signaled it will likely cut interest rates by a total of 75 basis points in 2024.”

“Locally, investors bought into the assumption that the BSP would follow in a similar fashion, maintaining its own policy rates, but reducing this next year.”

Also, the Asian Development Bank maintained growth forecasts for the Philippines at 5.7 percent in 2023 and 6.2 percent in 2024, making it the fastest-growing economy in Southeast Asia for both years.

Philstocks Financial Research and Engagement Officer Mikhail Plopenio said “the local market rose as investors cheered the Federal Reserve’s dovish outlook after it held policy rates unchanged in its recent meeting. The Federal Reserve stated that they anticipate 3 possible rate cuts for 2024, to be done in 25 bps increments.”

He explained that, “this gave hope that the Fed may ease their policies soon after more than a year-long combat against inflation.”