MANILA – Both the Philippine Stock Exchange index (PSEi) and the peso weakened on Wednesday due in part to the slowdown of the United States’ producer price index (PPI) last October and ahead of the policy meeting of the Bangko Sentral ng Pilipinas (BSP).
After rallying for several days, the main equities index shed 0.42 percent, or 26.85 points, to 6,392.09 points.
All Shares moved sideways with a drop of 0.10 percent, or 3.28 points, to 3,376.30 points.
Half of the sectoral gauges also finished the day in the negative territory, namely Financials, 1.30 percent; Holding Firms, 0.94 percent; and Industrial, 0.31 percent.
On the other hand, Mining and Oil gained by 0.96 percent, Services by 0.81 percent, and Property by 0.35 percent.
Volume reached 968.99 million shares amounting to PHP7.23 billion.
Gainers led losers at 92 to 82 while 49 shares were unchanged.
Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales, said the PPI for October was projected to have risen by 4 percent but it only rose by 2 percent.
Limlingan said the BSP is expected to match the 75 basis points increase in the Federal Reserve’s key rates earlier this month “to combat inflation.”
Earlier, BSP Governor Felipe Medalla said they are set to increase the policy rates by 75 basis points to ensure interest rate differential with the US.
Oil futures rose anew on news that oil supply to Hungary that passes through the Druzhba oil pipeline has been temporarily halted due to drop in pressures.
Limlingan said Brent crude oil futures rose to USD93.86 per barrel and the West Texas Intermediate (WTI) to USD86.92 per barrel.
Meanwhile, the local currency depreciated to 57.35 against the US dollar from its 57.21 close a day ago.
It opened the day at 57.38 and traded between 57.58 and 57.34. The average for the day stood at 57.436.
Volume rose to USD1.02 billion from the previous session’s USD766.9 million.
Rizal Commercial Banking Corporation chief economist Michael Ricafort traced the peso’s weakness to the same results for the PSEi and the increase in the prices of commodities in the international market due partly to the political risks in Poland.
He, however, said net foreign buying in the local bourse during the day helped buoy the local currency.
For Thursday, he forecasts the currency pair to trade between 57.20-57.50. (PNA)