UP. Both the Philippine Stock Exchange index (PSEi) and the peso ended the week up following the within-expected month-on-month expansion of US consumer price index (CPI) last December. The United States inflation rate rose by 0.1 percent month-on-month while full-year annual expansion slowed to 6.5 percent from last November's 7.1 percent, which heightened expectations for smaller hikes in the Federal Reserve's key rates. (PNA graphics)

MANILA – Risk-on sentiments reigned in the local bourse on Friday and allowed the main index to end the week up while the peso climbed to the 54-level.

The Philippine Stock Exchange index (PSEi) rose by 1.73 percent, or 118.01 points, to 6,951.54 points.

All Shares followed with a jump of 1.38 percent, or 49.58 points, to 3,637.62 points.

Financials led the sectoral gauges after it increased by 4.44 percent.

It was trailed by Industrial, 2.77 percent; Services, 1.24 percent; Mining and Oil, 0.81 percent; Holding Firms, 0.47 percent; and Property, 0.12 percent.

Volume reached 1.63 billion shares amounting to PHP9.24 billion.

Advancers led decliners at 126 to 64 while 46 shares were unchanged.

“Philippine shares snatched another winning day on as the US’ December CPI (consumer price index) report showed prices declined 0.1 percent over November,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.

The United States’ headline inflation rate in the last month of last year met expectations for the month-on-month change while it expanded by 6.5 percent on an annual basis, slower than the 7.1 percent year-on-year rise last November.

Limlingan said the latest CPI data from the world’s largest economy “heightened hopes that the Federal Reserve may soon slow its hiking.”

On the domestic front, Limlingan said statement from Bangko Sentral ng Pilipinas (BSP) Governor Felipe Medalla that domestic inflation likely peaked last December boosted sentiments.

On the other hand, oil prices in the world market rose anew, which Limlingan said was “supported by figures showing US CPI unexpectedly fell in December and by optimism over China’s demand outlook.”

Brent crude price increased by 1.7 percent to USD84.03 per barrel and the West Texas Intermediate (WTI) by 1.3 percent to USD78.39 per barrel.

Relatively, gains in the local bourse were mirrored by the peso after it finished the week at 54.89 from the previous session’s 55.29.

It opened the day unchanged at 54.95 and traded between 55.18 and 54.88. The average level for the day stood at 55.01.

Volume reached USD1.37 billion, lower than the previous day’s USD1.46 billion.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort traced the peso’s performance to the weakening of the US dollar following the release about US’ 14-year low inflation last December.

He said US CPI data “is one of the most important economic data being monitored, especially since the better-/lower-than-expected US CPI/inflation data started since November 10, 2022 that led to some relatively bigger gains in the global/local stock markets, bond/fixed income markets, and currency markets.”

“Thus, any further easing in the US CPI/inflation data would lead to reduced need for further Fed rate hikes/monetary tightening for the coming months, at the very least, especially if it eventually goes to the Fed’s target of 2 percent,” he added.

For next week, Ricafort said the currency pair is seen to trade between 54.60 to 55.20 while the range for Monday is projected to be between 54.80 to 55.00. (PNA)