MANILA – Recession concerns continue to dampen investors' sentiment resulting to another negative close for the local bourse’s main index Monday, but the peso strengthened against the US dollar.
The Philippine Stock Exchange index (PSEi) shed 1.27 percent, or 82.23 points, to 6,414.27 points.
All Shares followed with a slide of 0.97 percent, or 32.82 points, to 3,367.31 points.
Only the Property gained among the sectoral indices after it rose by 1.17 percent.
Services, in turn, registered the biggest drop at 5.98 percent and was trailed by the Financials, 0.97 percent; Industrial, 0.92 percent; Holding Firms, 0.47 percent; and Mining and Oil, 0.05 percent.
Volume reached 1.31 billion shares amounting to PHP18.72 billion.
Decliners led advancers at 123 to 55 while 45 shares were unchanged.
“Local and regional stocks continued their descent as investors struggled to share off recession worries after the Fed (Federal Reserve) upped its forecast for future hikes above previous expectations, saying that it now expects to hike rates to 5.1 percent,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.
The Fed’s previously eyed rate peak for next year is 4.3 percent, with the latest projection seen to further help tame the elevated inflation rate in the world’s largest economy, which, to date, is at its four-decade high level.
Oil prices also “bogged down by wide-spread recession fears,” Limlingan said.
Brent crude oil future dropped by 2.7 percent to USD79.04 per barrel and the West Texas Intermediate (WTI) by 2.4 percent to USD74.29 per barrel.
On the other hand, the local currency gained against the US dollar after closing the day at 55.41 from 55.56 Friday last week.
It opened the day at 55.5, a big improvement from its 55.85 start in the previous session.
It traded between 55.5 and 55.4, resulting to an average of 55.439.
Volume reached USD627.25 million, lower than the previous day’s USD902.27 million.
Rizal Commercial Banking Corporation chief economist Michael Ricafort traced the peso’s strength to the larger inflows of remittances from overseas Filipino workers in line with the Christmas holidays, the approval of the government’s 2023 national budget and the 2023-28 Philippine Development Plan, as well as progress of some proposed measures such as the increased property valuation and the passive income tax reforms.
He said easing of US inflation last November also contributed to the gains of the local currency.
He said the peso’s performance to date is similar to its counterparts in the region such as the Indian rupee, Indonesian rupiah, Chinese yuan, Malaysian ringgit and Thai baht.
For Tuesday's forecast, the peso to trade between 55.30-55.50 to a greenback. (PNA)