MIXED. The Philippine Stock Exchange index (PSEi) dipped on Tuesday (April 4, 2023) ahead of the release of the March inflation rate and the long weekend. On the other hand, the peso gained against the greenback due to correction. (PNA graphics)

MANILA – Investors turned risk-averse on Tuesday ahead of the release of the March inflation rate, resulting in the negative close of the main equities index, but the peso gained against the US dollar.

The Philippine Stock Exchange index (PSEi) shed 0.89 percent, or 57.95 points, to 6,472.04 points.

All Shares followed, declining by 0.47 percent, or 16.47 points, to 3,481.96 points.

Most of the sectoral gauges also ended the day in the negative territory, led by Financials, which dipped by 1.81 percent.

Trailing behind were Services, 1.61 percent; Holding Firms, 1.11 percent; Industrial, 0.41 percent; and Mining and Oil, 0.21 percent.

Only the Property index gained during the day after it rose by 1.15 percent.

Volume reached 2.4 billion shares amounting to PHP3.99 billion.

Decliners surpassed advancers at 92 to 91 while 60 shares were unchanged.

“Investors began selling local equities before the five-day break and right before the inflation release tomorrow,” said Luis Limlingan, Regina Capital Development Corp. head of sales.

The Philippine Statistics Authority is scheduled to release the March inflation report on Wednesday.

The rate of price increases slightly decelerated to 8.6 percent in February, little changed from the 14-year high of 8.7 percent in the previous month.

The Bangko Sentral ng Pilipinas forecast the March inflation rate to stay within 7.4 percent to 8.2 percent.

Limlingan said they forecast inflation to decelerate to 7.8 percent.

April 6 is Maundy Thursday, April 7 is Good Friday, and April 10 is a non-working holiday for the celebration of the Araw ng Kagitingan (Day of Valor).

Limlingan said many investors are worried about the path of the inflation rate and the possibility of a recession after news that members of the Organization of the Petroleum Exporting Countries (OPEC) would cut production this year.

He said prices of oil in the international market rose, with Brent crude up by 6.31 percent to USD 84.93 per barrel and the West Texas Intermediate (WTI) by 6.28 percent to USD80.42 per barrel.

Meanwhile, the local currency ended the day at 54.495 from 54.73 on Monday.

It started the day at 54.60, weaker than its 54.40 start in the previous session, and traded between 54.65 and 54.46. The day’s average stood at 54.576.

Volume went down to USD889.7 million from USD1.2 billion the previous day.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso corrected partly due to the impact of the seasonal increase of remittances during the Holy Week, which people took advantage of to travel, and expectations that the March inflation rate would further decelerate.

Ricafort said the peso has to date weakened by 2.3 percent against the greenback but is “still among the best performing major ASEAN (Association of Southeast Asian Nations)/Asian currencies.”

For Wednesday, the currency pair is expected to trade between 54.40 and 54.60. (PNA)