PH equities index slips but peso finishes Monday sideways

By Joann Villanueva

January 30, 2023, 6:02 pm

MANILA – Wait-and-see stance on the Federal Reserve’s rate decision later this week resulted to the negative close of the local bourse’s main index on Monday while the peso ended sideways against the US dollar.

The Philippine Stock Exchange index (PSEi) shed by 1.15 percent, or 81.19 points, to 6,970.97 points.

All Shares followed with a drop of 1.02 percent, or 37.67 points, to 3,659.96 points.

Most of the sectoral counters trailed the main index, led by the Mining and Oil after it fell by 3.25 percent.

It was followed by the Property, 2.21 percent; Industrial, 1.53 percent; Services, 1.35 percent; and Holding Firms, 1.08 percent.

Only the Financials index gained during the day after a jump of 0.51 percent.

Volume reached 1.21 billion shares amounting to PHP8.3 billion.

Decliners led advancers at 147 to 57 while 38 shares were unchanged.

“Philippine shares started the week in the red with attention specifically on the Fed (Federal Reserve) interest rate decision out this week,” said Luis Limlingan, Regina Capital Development Corporation head of sales.

The Federal Open Market Committee will have its two-day meeting starting on Jan. 31.

Limlingan said “many are still deciphering the recent discussion from Fed officials as to the direction of interest rates given the trajectory of inflation in recent months.”

The Fed is widely expected to announce rate hike that is smaller than 75 basis points as US’ consumer price index continues to decelerate.

Oil prices declined “as indications of strong Russian oil supply offset better-than-expected US economic growth data, strong middle distillate refining margins and hopes of a rapid recovery in Chinese demand.”

Limlingan said Brent crude futures slipped by 0.9 percent to USD86.66 per barrel and the West Texas Intermediate by 1.6 percent to USD79.68 per barrel.

Meanwhile, the local currency ended the day at 54.545 against the US dollar, sideways from its 54.47 close Friday last week.

It opened the day at 54.55, weaker than its 54.4 start at the end of last week.

It traded between 54.6 and 54.45, resulting to an average of 54.545.

Volume declined to USD687.86 million from USD946.65 million in the previous session.

Rizal Commercial Banking Corporation chief economist Michael Ricafort said the local unit registered correction due in part to the similar outcome for the PSEi.

He said investors are also awaiting the rate decision of the Federal Reserve, which is widely expected to increase key rates by 25 basis points.

“Market sentiment also supported recently by more dovish signals by the Fed and local monetary authorities that led to some downward correction in various government and BSP (Bangko Sentral ng Pilipinas) securities auction yields recently, particularly the latest week-on-week downward correction in Treasury bill auction results,” he said.

For Tuesday, the currency pair is seen to trade between 54.45 and 54.65. (PNA)