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PH stocks end flat, peso declines before Fed and BSP meetings

Prior to the policy meetings of the Federal Reserve and the Bangko Sentral ng Pilipinas, the major index of the local stock exchange concluded the first trading day of the week in a flat pattern (BSP).

To reach 6,585.20 points, the Philippine Stock Exchange index (PSEi) increased by 0.08 percent, or 5.08.

On the other hand, All Shares fell by 0.01 percent, or 0.41 points, to 3,436.99.

The majority of sectors’ indices rose during the day, including Financials (1.18%), Holding Firms (0.46%), Industrial (0.04%), and Mining and Oil (0.007%).

The property fell by 0.15 percent, while services fell by 1.60 percent.

A total of 570.19 million shares, or PHP5.51 billion, were traded.

At 102 to 84, decliners outnumbered advancers, while 52 shares remained unchanged.

According to Luis Limlingan, head of sales for Regina Capital Development Corporation (RCBC), “Philippine shares closed flat as anxieties over continued rate hikes by the Fed (Federal Reserve) lingered.”

The trajectory of policy rates in the upcoming weeks, according to Limlingan, could be determined by inflation this week, which Wall Street will be “focused on.”

This is because the Federal Open Market Committee (FOMC), which will meet on December 13 and 14, is likely to announce another rate hike, albeit one that is less drastic than the 75 basis points that have been announced in the last four meetings.

On December 15, the Monetary Board (MB), which sets policy rates for the BSP, will hold its final rate-setting meeting of the year and is anticipated to announce yet another increase in policy rates.

Furthermore, despite the bad economic statistics coming out of China, Europe, and the US, oil prices on the global market dropped once again due to “increasing recession fears.”

While the West Texas Intermediate (WTI) plummeted to USD76.10 per barrel, Brent crude oil futures set a fresh low for the year at USD71.02.

The peso’s value against the US dollar dropped from 55.37 close on Friday to 55.65 today.

It started the day at 55.4, down from the previous session’s opening price of 55.27.

It fluctuated between 55.67 and 55.4, with a 55.55 average.

Volume totaled USD683.95 million, which is less than the USD944 million from last week’s close.

According to Michael Ricafort, chief economist of Rizal Commercial Banking Corporation (RCBC), the peso corrected after a three-day rise last week.

The producer pricing index (PPI) in the US for November came in at a higher-than-anticipated 7.4 percent year over year, as well as data from the University of Michigan Sentiment index that “may still support future Fed rate hikes.”

Among these, Ricafort said that the peso was helped by the decline in world oil prices and could potentially benefit from the weakening of the US currency.

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