MANILA -- The Philippine Stock Exchange index (PSEi) finished the week’s first trading day up and the peso registered gains against the greenback on positive global growth prospects following the report of robust expansion of the US economy in the second quarter of 2018.
PSEi rose for the fifth consecutive session Monday after it ticked up by 0.93 percent, or 71.94 points, to 7,773.32 points.
A trader cited the report about the 4.1 percent growth of the US economy in the second quarter this year, the fastest rise since the third quarter of 2014, as a plus to investor sentiment during the day.
With developments pointing towards sustained strength of the world’s largest economy, investors are expecting key rates of the Federal Reserve to go up even further, the trader said.
With this development, most of the other counters tracked the main gauge, with the broader All Shares rising by 0.65 percent, or 29.75 points, to 4,645.28 points.
The sectors were led by Holding Firms, which rose by 1.70 percent. It was followed by Services, 1.16 percent; Industrial, 0.98 percent; Property, 0.80 percent; and Mining and Oil, 0.40 percent.
Financials, on the other hand, declined by 1.07 percent.
Volume reached 1.02 billion shares amounting to PHP5.61 billion.
Gainers led losers at 98 to 91 while 57 shares were unchanged.
The peso finished Monday at 53.22, slightly better than the 53.285 Friday last week, which a trader pointed to expectations for further increase in the Bangko Sentral ng Pilipinas’ (BSP) key rates next week.
As the Monetary Board's (MB) fifth rate-setting meeting for the year on August 9 draws near, analysts’ expectations were virtually confirmed by BSP Governor Nestor A. Espenilla Jr.’s recent statement that the Board is considering another hike in key rates, as a defensive action against continued inflation.
Rate of price increases in the first six months this year surpassed the government’s 2 to 4 percent target after it stood at 4.3 percent.
Monetary officials expect domestic inflation to be elevated this year but this is also expected to decelerate starting in the third quarter and for the rate to stay within target levels next year.
The rate hike expectations boosted the peso, whose strength showed early in the day when it opened at 53.25 from 53.50 in the previous session.
It traded between 53.32 and 53.19, resulting in an average of 53.263.
Volume reached USD664.5 million, lower than the USD794.8 million a day ago.
The currency pair is seen to trade between 53.20 and 53.40 Tuesday. (PNA)
