ANOTHER HIKE. The local bourse’s main index on Wednesday rises (Nov. 2, 2022) amidst expectations for another hike in the Federal Reserve’s key rates. However, the local currency weakened against the US dollar following the correction of the greenback. (PNA graphics)

MANILA – The local stock barometer started the shortened trading week higher ahead of the announcement of the Federal Reserve’s rate decision but the peso weakened to a United States dollar.
The Philippine Stock Exchange index (PSEi) jumped by 0.86 percent, or 52.81 points, to 6,206.24 points.
All Shares trailed with an increase of 0.61 percent, or 19.72 points, to 3,277.01 points.
Half of the sectoral gauges also rose during the day, namely Property, 3.54 percent; Holding Firms, 1.52 percent; and Financials, 0.43 percent.
On the other hand, Services fell by 1.75 percent, Mining and Oil by 0.40 percent, and Industrial by 0.12 percent.
Volume was thin at 496.31 million shares amounting to PHP6.29 billion.
Advancers led decliners at 105 to 74, while 47 shares were unchanged.
“Investors made bets ahead of the main highlight this week stateside, which is the Fed's (Federal Reserve) latest policy decision at the conclusion of its meeting on Wednesday, wherein the street expects an upward benchmark rate adjustment of three-quarters a point,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.
Limlingan said investors are also on a wait-and-see stance for the release of US’ non-farm payrolls for October on Nov. 4 and the Philippines October 2022 inflation rate, producers price index, and balance of trade report this week.
“More local corporate earnings have also come in which were either in-line or above expectations, which further boosted sentiment,” he said.
He also cited the jump in oil prices in the international market, with Brent crude up by 1.8 percent to USD94.51 per barrel and West Texas Intermediate (WTI) by 2 percent to USD88.27 per barrel.
Meanwhile, the local currency depreciated to 58.47 to a US dollar from 57.97 last Friday.
It opened the day at 58.05 and traded between 58.49 and 58.02. The average for the day stood at 58.224.
Volume reached USD 844.15 million from USD 912.35 in the previous session.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort attributed the peso’s weakness to correction after a strong performance last week.
“The US dollar also corrected higher recently vs. major global currencies to one-week highs ahead of the widely expected fourth large/jumbo rate hike of +0.75 (by the Fed) on Nov. 2, 2022 (US time zone),” he said.
Other drivers for the greenback’s strength include the stronger-than-expected US jobs opening data and the completion of the Bank of England’s (BoE) first sale of bonds (GBP750 million or USD 860 million) “that were bought under quantitative easing (QE) program, as well as signals of higher taxes in the UK that recently supported gains in the UK financial markets (after increased volatility earlier in October 2022),” he said.
Ricafort forecasts the peso to trade between 58.35-58.55 to a US dollar on Thursday. (PNA)