FED POLICY MOVES. Investors' decision to stay on the sidelines for indications on the Federal Reserve's policy moves ahead of Federal Reserve Chair Jerome Powell’s Congressional testimony, among others, resulted in the negative close of the local bourse's main index and the peso on Wednesday (June 21, 2023). Another driver of the day's trading was the policy rate decision of the Bangko Sentral ng Pilipinas (BSP) on Thursday. (PNA graphics)
MANILA – The Philippine Stock Exchange index (PSEi) ended Wednesday in the negative territory, tracking its United States counterparts, while the peso corrected lower against the greenback ahead of Federal Reserve Chairman Jerome Powell’s testimony in Congress.
The main equities index shed 0.38 percent, or 24.69 points, to 6,424.21 points.
All Shares followed with a 0.37 percent, or 12.73 points, drop to 3,426.81 points.
Most of the sectoral gauges also ended lower – Mining and Oil, 1.39 percent; Holding Firms, 0.94 percent; Industrial, 0.75 percent; and Services, 0.47 percent.
On the other hand, Financials rose by 0.55 percent and Property by 0.09 percent.
Luis Limlingan, Regina Capital Development Corp. head of sales, said the local bourse’s main index ended lower mirroring the path of US equity indices, which took a breather after a rally last week.
He said investors are also on a wait-and-see stance for Powell’s testimonies and the rate decision of the Bangko Sentral ng Pilipinas’ (BSP) policy-making Monetary Board (MB) on Thursday.
Oil futures also fell “on forecasts for slower oil demand growth in China” and the rate cuts in China’s lending rates.
Brent crude oil for August 2023 deliveries went down by 0.3 percent to USD75.90 per barrel and the West Texas Intermediate (WTI) by 1.8 percent to USD70.50 per barrel.
Meanwhile, the local currency ended the day at 55.645 against the US dollar from its 55.52 close a day ago.
It opened the day at 55.62, stronger than the previous session’s 55.75 start.
It traded between 55.68 and 55.57, resulting in an average of 55.629.
Volume declined to a little more than USD1 billion from the previous day’s USD1.21 billion.
Rizal Commercial Banking Corp. chief economist Michael Ricafort traced the peso’s performance during the day to correction partly ahead of Powell’s semi-annual testimony on monetary policy before US House Financial Services Committee on June 21 and the US Senate Banking Committee a day after.
He said markets are on the lookout for new leads on any Federal Reserve moves from these testimonies.
For Thursday, he projected the peso to trade between 55.55 and 55.75 against the US dollar. (PNA)
