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Stocks slip on risk-off sentiments; peso ends flat vs. dollar

By Joann Villanueva

October 20, 2022, 7:10 pm

<p><strong>STOCKS RALLY ENDS</strong>. The rise in benchmark US Treasury yields, among others, ends the rally of the local stock market's main index on Thursday (Oct. 20, 2022). However, the peso finished the trade sideways partly on the deficit position of the country's balance of payment (BOP) position last September and the drop in the country's foreign reserves.<em> (PNA graphics)</em></p>

STOCKS RALLY ENDS. The rise in benchmark US Treasury yields, among others, ends the rally of the local stock market's main index on Thursday (Oct. 20, 2022). However, the peso finished the trade sideways partly on the deficit position of the country's balance of payment (BOP) position last September and the drop in the country's foreign reserves. (PNA graphics)

MANILA – Risk-off sentiments ended the Philippine Stock Exchange index’s (PSEi) rally on Thursday but the peso finished the day sideways despite expectations for further hikes in the interest rates both here and overseas.
 
The local bourse’s main index shed 1.50 percent, or 92.32 points, to 6,055.99 points.
 
All Shares followed with a drop of 1.32 percent, or 43.01 points, to 3,223.61 points.
 
These finishes were tracked by most of the sectoral gauges, led by Industrial after it declined by 2.59 percent.
 
It was trailed by Holding Firms, 2.57 percent; Mining and Oil, 0.87 percent; Property, 0.68 percent; and Services, 0.67 percent.
 
Only Financials rose during the day after it jumped by 0.24 percent.
 
Volume continued to remain thin at 597.62 million shares amounting to PHP8.23 billion.
 
Decliners led advancers at 107 to 58, while 51 shares were unchanged.
 
“Philippine shares took a breather after successive sessions in the green as funds decided to trim positions following Wall Street’s struggles to extend its two-day winning streak amid a sharp rise in yields,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.
 
Limlingan cited the rise in US’ 10-year Treasury yield, which rose to as much as 4.136 percent, the highest since July 2008.
 
“Note that investors keep the Treasury yields in check to catch any recession signals,” he said.
 
Oil futures also increased “as caution over tightening supply countered the negative impact of uncertain demand, and news that the US will release more crude from its reserves,” he added.
 
Brent crude futures for December rose by 2.6 percent to USD92.41 a barrel and the West Texas Intermediate (WTI) by 3.3 percent to USD85.55 per barrel.
 
Meanwhile, the local currency finished the day at 58.94 from the previous day’s 58.945.
 
It opened the day at 58.92 and traded between 59.00 and 58.92. The average level for the day stood at 58.986.
 
Volume reached USD707.45 million, higher than the previous session’s USD654 million.
 
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso’s performance partly to the four-year wide deficit in the country’s balance of payment (BOP) position last September at USD2.3 billion, the decline to two-year low of the foreign reserves to USD93 billion as of end-September this year, the strength of the US dollar due to continued hawkish statements from Federal Reserve officials, and the rise of US Treasury yields.
 
Ricafort said these factors were countered partly by the net foreign buying in the local bourse and the current level of global oil prices, which are among the 8.5-month lows.
 
For Friday, the local currency is expected to trade between 58.80-59.00 against the US dollar. (PNA)
 

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