THE local stock barometer continued to climb on Tuesday as positive cues for an August rate cut buoyed investor sentiment while the peso strengthened for the second straight day.

The benchmark Philippine Stock Exchange index rose 0.42 percent, or 27.23 points, to 6,556.66.

The broader All Shares index added 13.82 points, or 0.39 percent, to 3,538.24.

"The local market rose as rate cut hopes were strengthened due to the dovish comments from Bangko Sentral ng Pilipinas (BSP) Governor Eli M. Remolona Jr.," said Philstocks Financial Inc. research and engagement officer Mikhail Plopenio.

"The BSP governor stated that the central bank cannot wait too long before cutting interest rates as this poses downside risks to the economy's output," Plopenio added, suggesting that a rate cut within this quarter or the fourth quarter was likely.

"The rate cut narrative seems to boost investor confidence as many [have been] anticipating it since the start of the year," he continued.

The record highs in the US markets overnight also boosted sentiment in local shares, said Regina Capital Development Corp. Managing Director Luis Limlingan.

"Philippine shares resumed their climb as the market inched closer to the 6,600 level, getting a boost from the overnight performance in the US," Limlingan said.

"Stocks across the region have been bought up under the assumption that the Federal Reserve could start [to] cut its benchmark interest soon, especially should the latest US CPI (consumer price index) this week allow for this," he added.

Sectoral performance was mixed, with conglomerates posting the biggest gain, up by 0.90 percent, while financials were the day's major losers, falling by 0.77 percent.

Gainers edged out losers, 97 against 90, while 56 stocks were unchanged.

Meanwhile, the Philippine peso strengthened for the second straight day against the greenback on Tuesday.

The currency closed at P58.44 against the dollar, up by six centavos from the previous close of P58.502, data from the Bankers Association of the Philippines showed.

Rizal Commercial Banking Corp. chief economist Michael Ricafort noted that the peso strengthened as the local stock market sustained its gains, climbing to a nearly 1.5-month high.

He added that the firmer peso was also due in part to the decline in the US dollar index, which gauges the value of the greenback against other key currencies, to near one-month lows as US Treasury yields continued to correct lower.

The peso opened trading at P58.54:$1 and ranged from P58.43 to P58.56. Volume reached P1.184 billion, up from the P1.074 billion recorded on Monday.

Ricafort said the local currency could range within the P58.35 to P58.55 levels today.