MANILA – Rising rates and fears for a possible recession in the US were brushed aside in the local bourse of Wednesday, resulting in an uptick of the main index as the peso slipped against the greenback.
The Philippine Stock Exchange index (PSEi) rose by 2.01 percent or 132.49 points, to 6,718.50 points.
All the other counters tracked the main index, with the All Shares up by 1.74 percent, or 60.37 points, to 3,537.07 points.
Property led the sectoral gauges after rising by 3.53 percent and was trailed by the Mining and Oil, 2.62 percent; Services, 2.59 percent; Holding Firms, 1.43 percent; Industrial, 1.35 percent; and Financials, 1.17 percent.
Volume reached 1.38 billion shares amounting to PHP6.7 billion.
Advancers led decliners at 122 to 72, while 47 shares were unchanged.
“Investors continued to flock to (the) Philippines after weighing the rising rate concerns, high inflation, and recessionary fears in the other regions,” Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales, said.
He explained that expected additional increases in the Federal Reserve’s key rates “hang over markets in the near term, along with fears of a looming recession.”
He said market participants will have a clearer picture of the future Fed decisions once minutes of the Federal Open Market Committee’s (FOMC) December 2022 meeting is released on Wednesday.
Meanwhile, the price of oil in the international market declined on Tuesday “pressured by weak demand data from China, coupled with a gloomy economic outlook and a stronger greenback.”
Limlingan said the price of Brent crude oil slipped by 4.2 percent to USD82.33 per barrel and the West Texas Intermediate (WTI) by 3.9 percent to USD77.15 per barrel.
On the other hand, gains in the local bourse did nothing to prop up the peso after it weakened to PHP55.91 against the US dollar during the day from its PHP55.79 close a day ago.
It opened the trade at PHP55.95, a depreciation from its PHP55.7 start in the previous session.
It traded between PHP55.895 and PHP56.145, resulting to an average of PHP56.014.
Volume rose to USD1.27 billion from the previous session’s USD853.65 million.
Rizal Commercial Banking Corporation chief economist Michael Ricafort traced the peso’s performance partly to the slower growth bank lending in the country last November, to 13.7 percent from month-ago’s 13.9 percent; and the lower inflows of remittances from overseas Filipino workers (OFWs) post for the Christmas holidays.
He said the peso’s weakness was limited by the correction in the global prices of oil as well as the continued rise of the PSEi.
For Thursday, he forecasts the peso to trade between PHP55.80 and PHP56.00 against the US dollar. (PNA)