MIXED. The local main equities index slipped on Thursday (May 18, 2023) due to profit-taking and even after a two-day rally. However, the peso gained against the US dollar due in part to the widely expected steady rate decision of the Bangko Sentral ng Pilipinas' (BSP) on its key policy rates. (File photo) 

MANILA – The local bourse’s main index reversed its course and fell on Thursday ahead of the Bangko Sentral ng Pilipinas’ (BSP) rate decision announcement but the peso gained to a greenback due to correction.

After a two-day rally, the Philippine Stock Exchange index (PSEi) shed 0.10 percent, or 6.47 points, to 6,628.64 points.

On the other hand, All Shares managed to keep its footing after rising by 0.02 percent, or 0.8 points, to 3,534.64 points.

Most of the sectoral indices also ended with gains, namely Mining and Oil, 1.03 percent; Industrial, 0.43 percent; Property 0.22 percent; Services, 0.08 percent; and Financials, 0.04 percent.

Holding Firms, on the other hand, declined by 0.67 percent.

Volume reached 729.91 million shares amounting to PHP3.96 billion.

Advancers led decliners at 90 to 81 while 61 shares were unchanged.

Luis Limlingan, Regina Capital Development Corporation (RCDC), head of sales, attributed the PSEi’s drop to profit taking after the index’s rise in the past two days.

Trading in the local bourse ended just before BSP announced the decision of its policy-making Monetary Board (MB) to keep the key rates steady due partly to the deceleration in domestic inflation rate.

Days before the rate setting meeting, Finance Secretary Benjamin Diokno, who sits in the seven-man MB, and BSP Governor and concurrent MB Chairman Felipe Medalla hinted of a possible pause in the central bank’s key rates.

The pause was made after nine consecutive rate hikes, totalling to 425 basis points, since May 2022.

“(It was) more of a non-event since the consensus was no rate hike,” Limlingan told the Philippine News Agency when asked if the BSP rate decision was among the factors during the day’s equities trading.

He said any future rate decision is projected to lean on latest inflation developments.

Oil prices, in turn, rose “as US debt ceiling negotiations outweighed worries about abundant supply.”

Brent crude oil futures increased by 2.7 percent to USD76.96 per barrel and the West Texas Intermediate (WTI) by 2.8 percent to USD72.93 per barrel.

On the other hand, the peso gained to a US dollar after it ended the day at 55.87 from 56.2 a day ago.

It opened the trade at 56.05 and ranged between 56.05 and 55.86. Average level for the day stood at 55.967.

Volume went down to USD1.23 billion from the previous session’s USD1.64 billion.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso’s outturn to the widely expected BSP rate decision and to Medalla’s statement of the possible cut in bank’s reserve requirement ratio (RRR) by June this year

He said investors’ sentiments globally were also supported by statements made by US President Joe Biden before his departure for Japan that a deal on US’ debt ceiling will likely be reached.

For Friday, Ricafort eyes the peso to trade between 55.80-56.00 against the US dollar. (PNA)