THE peso regained some ground, and the stock market rose back to the 6,800 level on Tuesday, with investors said to have cheered an interest rate cut outlook.

The currency strengthened by three and a half centavos to P56.035 against the dollar while the benchmark Philippine Stock Exchange index (PSEi) advanced by 56.05 points, or 0.82 percent, to 6,854.66.

The broader All Shares index climbed by 0.54 percent, or 19.09 points, to 3,581.70.

The peso opened at P56.09:$1 and ranged from P56.035 to P56.135. Volume hit P1.138 billion, lower than the P1.511 billion recorded in the previous session.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso ended the day slightly stronger after the stock market rebounded.

Mikhail Plopenio, researcher at Philstocks Financial Inc., said the PSEi rose as investors "regained confidence" following a two-day decline.

"The positive sentiment was fueled by rate-cut hopes from the Bangko Sentral ng Pilipinas after Pantheon Economics stated that the central bank may start to cut rates by May," he said.

Plopenio added that the People's Bank of China's decision to keep short-term interest rates unchanged and reduce its five-year loan prime rate also boosted sentiment.

Market participation improved, resulting in a net value turnover of P4.57 billion — slightly higher than the year-to-date average of P4.56 billion.

Foreigners were net buyers, recording a net inflow of P666.48 million.

Services led gainers with a 2.4-percent increase. Industrials, on the other hand, declined the most by 0.85 percent.

Advancers outnumbered decliners, 106 against 78, while 46 were unchanged.