HIGHER. The main equities index and the local currency finish the week up amidst the higher-than-expected rise of US' September inflation rate. Consumer price index (CPI) in the US decelerated to 8.2 percent in the ninth month this year from month-ago's 8.3 percent, with the month-on-month change at 0.4 percent, higher than expectations. (PNA graphics)

MANILA – Both the main equities index and the peso finished the week up despite the higher-than-expected September inflation rate in the United States.

The Philippine Stock Exchange index (PSEi) gained by 0.15 percent, or 9.11 points, to 5,904.75 points.

All Shares trailed with a jump of 0.41 percent, or 12.99 points, to 3,177.74 points.

Most of the sectoral gauges tracked the main index namely Property, 1.85 percent; Mining and Oil, 1.53 percent; Financials, 0.86 percent; and Industrial, 0.16 percent.

On the other hand, Services fell by 1.18 percent and Holding Firms by 0.53 percent.

Volume remains thin at 443.29 million shares amounting to PHP4.65 billion.

Advancers led decliners at 115 to 70, while 40 shares were unchanged.

“Philippine shares managed to close with moderate gains despite the hotter-than-expected US September inflation reading,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.

Limlingan said the rate of price increases rose by 0.4 percent month-on-month, higher than the 0.3 percent estimate by Dow Jones.

Meanwhile, the local currency finished the day’s trade at 58.935 after ending the previous session again at its record-low of 59.00 to a dollar, the third time it finished at this level to date.

It opened the day at 58.97, sideways from its 58.9 start on Thursday.

It traded between 58.88 and 58.985, resulting in an average of 58.931.

Volume reached USD542.8 million, higher than the previous day’s USD524.08 million.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the local currency gained after a two-day slide due to the correction of the greenback, which he traced to the higher-than-expected September inflation rate in the US at 8.2 percent.

Although the latest inflation print in the US is a deceleration from the previous month’s 8.3 percent, it is still among the highest in more than 40 years or since January 1982, he said.

“Nevertheless, the US dollar/peso exchange rate continued to stabilize for the third straight week at below the 59.00 psychological mark after BSP (Bangko Sentral ng Pilipinas) Governor (Felipe) Medalla signaled possible large local policy rate hike of +0.50 or +0.75 on the next rate-setting meeting on November 17, 2022, in an effort to reduce the pressure on the peso and also cool inflation as this could impact on economic recovery,” he added.

Ricafort said Medalla “also signaled a combination of measures, such as using international reserves, raising rates, and, if possible, some form of international cooperation.”

He said these positive factors got further boost after the Bankers Association of the Philippines (BAP) vowed to continue working with the central bank to fight speculative activities to ensure orderly market operations.

“The peso also became stronger after Department of Finance Secretary (Benjamin) Diokno signaled plans by the Marcos administration to extend the lower tariff rates on key commodities, such as pork, corn, rice, and coal, to 2023, as part of the government’s effort to curb higher prices/inflation especially on food,” he said.

The rise of the local bourse’s main index for the fourth consecutive day on Friday also contributed to the peso’s improvement, he said.

“Global market sentiment is also supported by slightly slower-than-expected China inflation data and UK officials working on a reversal on UK Prime Minister Truss' tax-cut plan,” he added.

Ricafort said the local currency has weakened by 15.6 percent or around PHP7.936 against the US dollar compared to its PHP50.999 close in end-2021.

He said the peso’s immediate resistance level is 59.00 while immediate support level is between 58.50-58.75. (PNA)