RECESSION FEARS. Philippines' main stocks index ended the week sideways after rising to the 7,000-level in the middle of this week as investors continue to see sustained hikes in the Federal Reserve's key rates this year. Relativey, recession fears, among others, affected the peso's trading with the US dollar this week despite the depreciation of the greenback against other major currencies. (PNA graphics) 

MANILA – Both the local bourse’s main index and the peso ended the week sideways as their US counterparts weaken on signs of recession, among others, in the world’s largest economy.

The Philippine Stock Exchange index (PSEi) shed 0.08 percent, or 5.39 points, to 7,056.62 points.

All Shares followed with drop of 0.10 percent, or 3.82 points to 3,682.86 points.

Half of the sectoral gauges also finished the week on the red namely Services, 0.85 percent; Industrial, 0.54 percent; and Financials, 0.44 percent.

On the other hand, Mining and Oil rose by 1.32 percent, Property by 0.83 percent, and Holding Firms by 0.35 percent.

Volume reached 1.56 billion shares amounting to PHP6.86 billion.

Advancers led decliners at 97 to 86 while 59 shares were unchanged.

“It was a quiet session in the local market following a sluggish performance once again in the US,” Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales, said, citing US stocks markets indices’ third straight day of decline “as corporate earnings and economic data signal a slowing economy.”

Aside from wait-and-see stance for additional corporate earnings reports, he said investors “will also listen closely to speeches from Fed (Federal Reserve) officials ahead of the central bank’s February meeting, seeking clues on the size of the rate hike that’s likely forthcoming.

Markets expect lower than 75 basis points increase in the Fed’s key rates in each of the meetings of the Fed this year partly due to the slowdown of inflation in the world’s largest economy.

On the local front, investors are awaiting the release of the fourth quarter 2022 and full-year gross domestic product (GDP) report next week, Limlingan said.

Meanwhile, the volatility of oil prices resulted to its rise on Thursday “extending a recent rally built around rising Chinese demand, while the market wrote off a second straight week of large builds in US crude inventories.”

Brent crude oil futures rose by 1.4 percent to USD86.16 per barrel and the West Texas Intermediate (WTI) by 1.1 percent to USD80.33 per barrel.

Similarly, the local currency ended the week’s trade at 54.54 from the previous session’s 54.63.

It opened the day at 54.75 and traded between 54.83 and 54.44. Average level for the day stood at 54.639.

Volume reached USD1.05 billion, lower than day-ago’s USD1.25 billion.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the peso ended sideways partly on recession fears in the US, smaller but continued hikes in the Federal Reserve and Bangko Sentral ng Pilipinas’ (BSP) key rates, as well as possible cut in domestic banks’ reserve requirement ratio.

He said the local unit declined for the third straight week partly due also to the general easing of global crude oil prices compared to the levels it hit after the Russian invasion of Ukraine in February 2022.

He said optimism is also driven partly by the continued reopening of the Chinese economy but noted that risks remain following the rise of coronavirus disease 2019 (Covid-19) cases in the second largest economy .

He said decline in long-term interest rates in the country, as shown by the drop in the central bank’s debt papers’ securities , is also supporting sentiments among investors.

For next week, the local currency is projected to trade between 54.35-54-85 while the range for Monday is seen to be within 54.45 and 54.65. (PNA)