Local stocks advanced as investors drew encouragement from signals that the Bangko Sentral ng Pilipinas (BSP) will refrain from aggressive interest-rate hikes, easing worries over rising borrowing costs and bolstering appetite for risk assets.

The Philippine Stock Exchange index (PSEi) added 49.01 points, or 0.78 percent, to close at 6,353.04 on Wednesday, July 29. Large-cap industrial conglomerates led the session's broad-based rally, while the mining sub-index proved to be the sole outlier among sector benchmarks, ending the day in negative territory.

Trading activity picked up notably across the exchange, with overall turnover expanding to 495 million shares valued at ₱7.44 billion. Market breadth was decisively positive, as advancing issues beat declining ones 117 to 75, while 56 stocks finished unchanged.

Domestic equities found steady footing after central bank officials indicated that monetary tightening would remain measured for the remainder of the year, providing clarity for market participants.

The local bourse ended higher as investors welcomed the central bank's view that the likelihood of more aggressive monetary tightening this year remains low, supporting risk appetite, according to Luis Limlingan, managing director at Regina Capital Development Corp.

Buying interest was further bolstered by opportunistic bargain hunting among benchmark blue chips ahead of the upcoming second-quarter corporate earnings season. Market participants appear to be looking past immediate macroeconomic pressures, placing bets on potential economic acceleration during the second half of the year even as external headwinds linger.

However, broader market gains were somewhat capped as local traders carefully balanced domestic optimism against geopolitical volatility and upcoming decisions by foreign monetary authorities. The local market rose on the back of bargain hunting following previous losses, but investors maintained a cautious stance following the surprise attack by Iran on US military facilities and ahead of the US Federal Reserve’s policy decision, said Japhet Tantiangco, research manager at Philstocks Financial Inc.

Several key domestic catalysts continued to anchor investor confidence throughout the trading day. Michael Ricafort, chief economist at Rizal Commercial Banking Corp., pointed to proposed tax relief legislation as a potential growth driver for household consumption, which could directly benefit consumer-focused listed companies.

At the same time, a firmer domestic currency provided a supportive backdrop, with the peso locking in its third consecutive day of appreciation, helping shore up sentiment across the local bourse.