WEAKER. Concerns on the proposal to raise US government's debt ceiling, which faces another challenge after talks between the White House and US lawmakers were halted, resulted in the negative close of the local bourse's main index and the peso on Monday (May 22, 2023). This also raised the possibility of a pause in the Federal Reserve's key rates next month. (PNA graphics)

MANILA – Risk-off sentiments partly due to the debt ceiling concerns in the United States resulted in the negative close of the main equities index and the peso on Monday.

The Philippine Stock Exchange index (PSEi) shed 0.66 percent, or 43.72 points, to 6,620.83 points.

All Shares followed with a decline of 0.40 percent, or 14.34 points, to 3,534.03 points.

Most of the sectoral indices also ended in the negative territory, namely Financials, 1.11 percent; Property, 0.71 percent; Industrial 0.68 percent; Holding Firms, 0.45 percent; and Services, 0.34 percent.

Only the Mining and Oil index managed to keep its footing after ending the day up by 0.08 percent.

Volume reached 1.73 billion shares amounting to PHP7.03 billion.

Losers surpassed gainers at 116 to 67, while 47 shares were unchanged.

Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales, traced the PSEi’s performance to the suspension of the ongoing talks between the White House and US lawmakers due to “serious differences” vis-à-vis the proposal to increase US’ borrowing limit, which is currently at USD31 trillion.

This, despite the June 1 deadline before the US faces default.

Because of this development, spot gold prices in the international market rose by 1.2 percent to USD1,981.79 per oz. and US gold futures inched up by 1.1 percent to USD1,981.60 per oz.

Oil prices in the international market fell after the pause in the debt ceiling talks.

Brent crude oil futures slipped to USD75.58 per barrel and the West Texas Intermediate (WTI) to USD71.69 per barrel.

Meanwhile, the peso weakened against the US dollar and closed the day at 55.82 from 55.67 last Friday.

It opened the day at 55.67 and traded between 55.84 and 55.65. The average level for the day stood at 55.797.

Volume rose to USD981.5 million from the previous session’s USD979.6 million.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso’s performance to the debt ceiling talks in the US and the lesser chance for a hike in the Federal Reserve’s key rates next month.

He forecasts the peso to trade between 55.70 and 55.90 to a US dollar on Tuesday. (PNA)