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PH stocks slip on US recession fears; peso almost flat

By Joann Villanueva

April 13, 2023, 8:10 pm

<p><strong>RECESSION FEARS</strong>. The main equities index slipped anew on Thursday (April 13, 2023) due to recession fears in the United States, partly due to the latest banking crisis in the world's largest economy. However, the peso ended the day sideways against the US dollar. <em>(PNA graphics)</em></p>

RECESSION FEARS. The main equities index slipped anew on Thursday (April 13, 2023) due to recession fears in the United States, partly due to the latest banking crisis in the world's largest economy. However, the peso ended the day sideways against the US dollar. (PNA graphics)

MANILA – The local bourse’s main index shed anew on Thursday on fears for a possible United States recession following the release of the minutes of the Federal Reserve’s meeting last March, but the peso ended sideways.

The Philippine Stock Exchange index (PSEi) lost 0.32 percent, or 20.55 points, to 6,448.87 points.

All Shares followed with a drop of 0.25 percent, or 8.75 points, to 3,466.52 points.

Most of the sectoral gauges also slipped during the day, led by Property after it declined by 0.94 percent.

It was trailed by Industrial and Holding Firms, both down by 0.39 percent; Mining and Oil, 0.35 percent; and Financials, 0.008 percent.

Only the Services index gained during the day after it rose by 0.17 percent.

Volume totaled 967.74 million shares amounting to PHP5.31 billion.

Decliners led advancers at 124 to 65 while 44 shares were unchanged.

“Philippine shares notched lower as investors weighed recession risk following the latest meeting minutes from the Fed,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.

Minutes of the Federal Open Market Committee (FOMC) meeting last March 21-22 showed that US monetary authorities expect a recession in the latter part of this year due in part to the latest banking issues in the US.

“This overshadowed the fact that inflation cooled in March as the Fed’s interest rate increase showed more impact,” Limlingan said.

US’ consumer price index (CPI) decelerated further to 5 percent year-on-year in the third month this year, slower than expectations, and expanded by 0.1 percent on a monthly basis.

Both figures are slower than the 6 percent annual CPI rise last February and the 0.4 percent expansion month-on-month.

Oil prices rose in the international market despite the deceleration of US’ inflation rate which brings hope that the Fed’s rate hiking cycle is near it end.

Brent crude rose 2.01 percent to USD87.33 per barrel and the West Texas Intermediate (WTI) by 2.1 percent to USD83.26 per barrel.

Meanwhile, the local currency ended the day at 55.26 against the US dollar, little changed from its 55.22 close a day ago.

It opened Thursday at 55.15, weaker than its 55.05 start in the previous session.

It traded between 55.4 and 55.13, resulting in an average of 55.27.

Volume rose to USD1.2 billion from USD935.98 million on Wednesday.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso’s weakness partly to the rise of oil prices in the international market and the decline of the PSEi.

However, he said the easing of the greenback to its new two-month low against other major currencies limited the peso’s decline.

For Friday, Ricafort forecasts the peso to trade between 55.15 and 55.35 against the US dollar. (PNA)

 

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