MANILA -- The Peso ended Tuesday's session sideways against the US dollar despite the strong pull towards the 54-level but the Philippine Stock Exchange index (PSEi) declined for the fifth straight day on trade war concerns overseas and rise of domestic inflation rate.
The local unit ended the day at 53.94, which is also the currency’s opening level for the day, from 53.88 a day ago.
It strengthened to 53.87 but weakened to 53.97, resulting in an average of 53.924.
Volume of trade reached USD434.1 million, lower than the USD434.9 million a day ago.
A trader said worries on rising domestic inflation continue to affect the local currency.
Another factor is the trade concerns between the US and China following the recent announcement that the US might slap more tariff on Chinese goods.
On the other hand, the main equities gauge fell 1.03 percent, or 78.14 points, to 7,518.01.
BDO chief strategist Jonathan Ravelas said bargain hunting was up “as there will always be markets and companies that will do better than others amid the ongoing US-China trade war and rising inflation environment.” He, however, said that investors remain cautious given the inflation uptick, which rose to 6.4 percent last August.
“Market is awaiting any leads to further rein in inflation like non-monetary measures thereof,” he said.
Meanwhile, Ravelas said listed companies got a boost from the recent approval by members of the House of Representatives of the second tax reform program, which proposes to cut corporate income tax rates. “This will be positive for listed companies and could offer a lift. Also, it highlights government to deliver much need(ed) reforms to support the growth agenda,” he said.
Landbank market economist Guian Angelo S. Dumalagan said PSEi slipped anew due to “apprehensions” on the second meeting between US President Donald Trump and North Korean leader Kim Jong-un, as well as the US-China trade issues.
He explained that speculation as to the topic of the tete-a-tete between President Rodrigo R. Duterte and lawyer Salvador Panelo resulted in some jitters “since market is guessing the content of the sudden announcement.” (PNA)
