RATE DECISION. Both the main equities index and the peso ended Wednesday (Dec. 14, 2022) with gains as US inflation rate eased to 7.1 percent last November. Economists said investors are also awaiting the rate decision of the Federal Reserve. (PNA graphics)

MANILA – The main equities index recovered on Wednesday following the easing of the United States inflation rate last November while the peso gained against the US dollar.
The Philippine Stock Exchange index (PSEi) gained by 0.50 percent, or 32.69 points, to 6,615.07 points.
All Shares followed with an increase of 0.52 percent, or 17.92 points, to 3,449.57 points.
Most of the sectoral indices also increased during the day, led by Holding Firms after it rose by 1.08 percent.
It was trailed by Financials, 0.42 percent; Industrial, 0.35 percent; Mining and Oil, 0.30 percent; and Services, 0.21 percent.
Volume reached nearly 5.5 billion amounting to PHP115.96 billion.
Advancers led decliners at 102 to 73 while 37 shares were unchanged.
“Philippine shares rose once again, propped by a cooler-than-expected CPI (consumer price index) report,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.
US’ CPI for November 2022 rose 7.1 percent year-on-year, slower than the 7.3 percent consensus and the 7.7 percent annual rate in the previous month.
Limlingan said the latest inflation print “raised hope that inflationary pressures could be abating.”
The Federal Open Market Committee (FOMC) will end its two-day meeting later in the day and it is widely expected to hike the Federal Reserve’s key rates by 50 basis points following four consecutive 75 basis point increases.
Limlingan said investors in the local bourse stayed at the sidelines while awaiting the results of the Fed decision.
He said sentiments were partly buoyed by the improvement in the country’s trade gap, which narrowed to its 17-month low last October to USD3.31 billion, “supported by better external demand amid the holidays.”
Oil prices also rose, “buoyed by supply jitters as a key pipeline supplying the US closed and Russia threatened a production cut even as China’s loosening Covid-19 restrictions bolstered the fuel demand outlook.”
Brent crude oil futures inched up by 2.5 percent to USD77.99 per barrel and the West Texas Intermediate (WTI) by 3 percent to USD73.17 per barrel.
Meanwhile, the local currency improved  to 55.745 against the US dollar from 55.9 close a day ago.
It opened the day at 55.65 and traded between 55.82 and 55.6. The average level for the day stood at 55.701.
Volume declined to USD731.72 million from USD1.12 billion a day ago.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the peso closed to its new one-week low from its 55.17 close last Dec. 9 due to lower-than-expected increase in US’ inflation rate last November.
Ricafort said the weakening of the greenback to its lowest in more than five months due partly to the easing of the US’ 10-year Treasury yield also helped the peso during the day.
For Thursday, the local currency is expected to trade between 55.65 to 55.85 against the greenback. (PNA)