MANILA – Expectations that the Federal Reserve’s rate hiking cycle is coming to an end lifted sentiments in the local bourse and allowed the main index to end the week up, but the peso weakened against the US dollar.
The Philippine Stock Exchange index (PSEi) gained 0.73 percent, or 46.92 points, to 6,508.34 points.
All Shares followed with a jump of 0.67 percent, or 23.04 points, to 3,467.11 points.
Most of the sectoral indices gained during the day, led by the Services after it increased by 2.11 percent.
It was trailed by Property, 1.77 percent; Industrial, 0.50 percent; and Holding Firms, 0.45 percent.
Meanwhile, Mining and Oil slipped by 0.32 percent and Financials by 0.14 percent.
Volume reached 993.78 million shares amounting to PHP53.51 billion.
Advancers led decliners at 96 to 81 while 43 shares were unchanged.
“Philippine shares were bought once again on bets that the rate hikes were coming to an end after the Federal Reserve announced it would not increase rates in its meeting this week,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.
The Federal Open Market Committee (FOMC), after its June 13-14, 2023 meeting, kept the Fed’s key rates steady after hiking it for 10 consecutive meetings since March 2022.
To date, the Fed’s key rates are between 5.00-5.25 percent, from a record low of zero to 0.25 percent.
Oil prices rose in the international market by 3 percent to USD74.06 per barrel for the Brent crude, and by 3.1 percent to USD69.19 per barrel for the West Texas Intermediate (WTI), after the People’s Bank of China (PBOC) reduced the lending rate of one-year medium-term lending facility (MLF) loans to some financial institutions by 10 basis points to 2.65 percent, the first cut in 10 months to boost recovery of the world’ second largest economy.
On the other hand, the peso ended the week at 55.86 to a US dollar, sideways from its 55.945 close on Thursday.
It opened the day at 55.82, an improvement from its 56.00 start in the previous session.
It traded between 55.888 and 55.73, resulting in an average of 55.807.
Volume rose to USD969.15 million from the day-ago’s USD729.5 million.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso performance to, among others, the downward correction of the US dollar, the hints from Philippine monetary authorities about the possible keeping of its key rates until the end of this year, and the narrower projected deficit in the country’s balance of payment (BOP) position for the year.
For next week, the currency pair is seen to trade between 55.55-56.05, while the range for Monday is projected to be between 55.75-55.95. (PNA)
