The Philippine Stock Exchange index (PSEi) snapped a three-day losing streak on Wednesday, Feb. 18, as bargain hunters returned to the floor, betting that the central bank will deliver a widely expected interest rate cut at its policy meeting.

The benchmark PSEi gained 26.22 points, or 0.41 percent, to finish at 6,394.77. While the advance was broad enough to overcome a retreat in industrial shares, trading remained relatively subdued.

Value turnover stood at ₱5.17 billion, with 942 million shares changing hands. Gainers managed to edge out losers 101 to 93, while 63 issues remained unchanged.

The recovery was largely attributed to a shift in sentiment as investors moved to pick up beaten-down stocks following a recent period of weakness.

Luis Limlingan, managing director at Regina Capital Development Corp., noted that the move was driven by selective buying in heavyweights as market participants positioned themselves ahead of the Bangko Sentral ng Pilipinas’ announcement.

This cautious optimism suggests that while the broader outlook remains sensitive to macroeconomic shifts, the current price levels proved attractive enough for a technical rebound.

Support for the move also came from a strengthening local currency. The peso appreciated to its strongest level in nearly five months, providing a stabilizing force for domestic equities.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the currency’s performance, combined with the anticipation of a 25-basis-point reduction in the BSP’s policy rate, served as the primary catalysts for the day’s gains.

A lower interest rate environment typically boosts corporate earnings by reducing borrowing costs and encourages a rotation from fixed-income assets into the equity market.

Japhet Tantiangco, research manager at Philstocks Financial, said that positive cues from Wall Street overnight further emboldened local investors to hunt for bargains. He emphasized that the combination of a more favorable exchange rate and the prospect of monetary easing has provided the market with a much-needed lift after a lackluster start to the week.

The Services sector led the day’s advance, offsetting a decline in the Industrial sector. Traders are now looking to the BSP’s decision tomorrow to determine if the current momentum can be sustained or if the market will return to a defensive posture amid global economic uncertainty.