ANTICIPATIONS. Expectations for additional key rates hikes by the Federal Reserve and the Bangko Sentral ng Pilipinas (BSP) this week made investors on the edge and the main equities index kept its footing unlike the peso. Inflation concerns continue to have a huge impact on the rate hikes although the rate increase for both the Fed and the BSP are expected to be lower than last month's level. (PNA graphics)

MANILA – The local bourse’s main index ended the week’s first trading day sideways but the peso weakened to a United States dollar ahead of the policy meetings of the Federal Reserve and the Bangko Sentral ng Pilipinas (BSP).

The Philippine Stock Exchange index (PSEi) gained 0.08 percent, or 5.08 points, to 6,585.20 points.

All Shares, on the other hand, slipped by 0.01 percent, or 0.41 points, to 3,436.99 points.

Most of the sectoral indices gained during the day namely Financials, 1.18 percent; Holding Firms, 0.46 percent; Industrial, 0.04 percent: and Mining and Oil, 0.007 percent.

Services slipped by 1.60 percent and Property by 0.15 percent.

Volume reached 570.19 million shares amounting to PHP5.51 billion.

Decliners led advancers at 102 to 84 while 52 shares were unchanged.

“Philippine shares closed flat as worries persisted over continued rate hikes by the Fed (Federal Reserve),” said Luis Limlingan, Regina Capital Development Corporation (RCBC) head of sales.

Limlingan said Wall Street “will be focused on inflation this week, which could determine the trajectory of policy rates in the coming weeks.”

This, as the Federal Open Market Committee (FOMC) will have its meeting on Dec. 13 to 14 and it is widely expected to announce another rate hike although smaller than the 75 basis points in the past four meetings.

The BSP’s policy-making Monetary Board (MB) will also have its last rate-setting meeting for this year on Dec. 15 and it is also expected to announce another increase in policy rates.

Moreover, oil prices in the international market slipped anew “as growing recession fears negated any supply woes after weak economic data from China, Europe and the United States.”

Brent crude oil futures registered a new low for this year at USD71.02 per barrel while the West Texas Intermediate (WTI) fell to USD76.10 per barrel.

Meanwhile, the peso weakened to 55.65 from 55.37 close to a US dollar last Friday.

It opened the day at 55.4, a depreciation from its 55.27 start in the previous session.

It traded between 55.67 and 55.4, resulting in an average of 55.55.

Volume reached USD683.95 million, lower than the USD944 million at the end of last week.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the peso corrected after a three-day rally last week.

Other factors during the day’s foreign currency trading include the higher-than-expected producer price index (PPI) in the US for November at 7.4 percent year-on-year, and the University of Michigan Sentiment index data “that could still support future Fed rate hikes.

Amidst these factors, Ricafort said the peso was buoyed by the drop in global oil prices, among others, and can also get a lift from the weakening of the US dollar.

He projects the peso to trade between 55.50 to 55.75 to a greenback on Tuesday. (PNA)