RISK-OFF. Volatility once again shot up on Wednesday (April 26, 2023) following a report by San Francisco-based First Republic Bank about a 40 percent decline in its deposits in the first quarter of 2023. However, the peso managed to end the day sideways against the US dollar. (PNA graphics)
MANILA – Concerns about the United States banking sector resulted in the negative close of the local bourse’s main index on Wednesday but the peso ended the trade sideways against the US dollar.
The Philippine Stock Exchange index (PSEi) finally succumbed to risk-off sentiments and declined by 0.81 percent, or 53.15 points, to 6,540.24 points.
All Shares went down by 0.41 percent, or 14.53 points, to 3,492.26 points.
Most of the sectoral indices also ended in the negative territory – Financials slid by 1.42 percent; Industrial by 0.89 percent; Holding Firms by 0.69 percent; and Property by 0.13 percent.
On the other hand, Mining and Oil increased by 1.30 percent and Services by 0.13 percent.
Volume reached 766.97 million shares amounting to PHP5.45 billion.
Decliners led advancers at 101 to 95 while 47 shares were unchanged.
“Philippine shares edged lower following First Republic Bank’s statement that its deposits dropped 40 percent y/y (year-on-year) to USD104.5 billion in 1Q23 (first quarter of 2023), which reignited concerns about the banking sector,” said Luis Limlingan, Regina Capital Development Corp. head of sales.
The San Francisco-based financial institution was among the US banks that were rattled last month after heavy deposit outflows after the collapse of the Silicon Valley Bank and Signature Bank.
The concerns in the US banking sector further aggravated risk-off sentiments vis-à-vis the path of the US economy and its possible recession.
Oil prices fell “as deepening concerns of an economic slowdown and a stronger dollar outweighed hopes of higher Chinese demand and lower US crude stocks.”
Brent crude oil futures slipped by 2.4 percent to USD80.77 per barrel and the West Texas Intermediate (WTI) by 2.2 percent to USD77.07 per barrel.
Meanwhile, the peso ended the day sideways against the US dollar at 55.62 from 55.54 the previous day.
It opened the day at 55.57 and traded between 55.71 and 55.54, averaging 55.608.
Volume reached USD1.23 billion, down from USD1.27 billion in the previous session. (PNA)
