UP. Bargain hunting lifted the local bourse's main index on Tuesday (Dec. 20, 2022) amidst concerns on the possible recession in the United States. The Philippine peso also gained against the US dollar due to the seasonal increase in remittances from overseas Filipino workers (OFWs), optimism on the achievement of the government's 2022 growth target and extension of the temporary reduction of import tariff for several products. (PNA graphics)

MANILA – Recession concerns in the United States resulted in bargain hunting in the local bourse on Tuesday that boosted the main index which also benefited the peso.

After a slide in recent days, the Philippine Stock Exchange index (PSEi) rose by 0.68 percent, or 43.85 points, to 6,458.12 points.

All Shares rose by 0.51 percent, or 17.09 points, to 3,384.40 points.

Most of the sectoral indices also gained during the day, namely Services, 2.09 percent; Mining and Oil, 1.13 percent; Property, 0.65 percent; Holding Firms, 0.56 percent; and Industrial, 0.44 percent.

Only the Financials index ended in the negative territory after it ended sideways with a drop of 0.08 percent.

Volume was thin at almost 509 million shares amounting to PHP5.58 billion.

Advancers led decliners at 90 to 77 while 48 shares were unchanged.

“Investors turned bargain hunters finally in the Philippines as the fading Santa Claus rally in the US increased recession concerns,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.

Limlingan traced the increase to oil prices to China’s reopening of its economy amidst recession fears.

Brent crude oil futures increased to USD79.80 per barrel and the West Texas Intermediate (WTI) to USD75.19 per barrel.

The local currency ended the day at 55.24 against the US dollar from its 55.41 close a day ago.

It opened the day at 55.4 from 55.5 start in the previous session.

It traded between 55.45 and 55.23, resulting in an average of 55.333.

Volume reached USD940.55 million, higher than the previous day’s USD627.25 million.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort identified the factors that boosted the peso to optimism for the achievement of the government’s 6.5 to 7.5 percent growth target for this year; the extension of the temporary reduction of import tariff on pork, meat, cork and rice until end-December 2023 and coal beyond 2023; latest signals for possible cut in banks’ reserve requirement ratio (RRR); and additional hikes in the Bangko Sentral ng Pilipinas’ (BSP) key policy rates.

Ricafort said the peso is currently insulated from volatilities because of the seasonal increase of remittances from overseas Filipino workers (OFWs).

“Market sentiment also boosted amid recent signals that China would boost its economy in 2023, also after recent measures to ease some of its Covid restrictions,” she said.

For Wednesday, Ricafort forecasts the peso to trade between 55.15 to 55.35 to a US dollar. (PNA)