MANIILA – Due to inflation fears, the Philippines' major stock index fell again on Wednesday,…
Another PH equity index sli is triggered by recession concerns.
The major index of the local stock exchange closed Monday with another negative reading due to persistent investor concerns over the recession, but the peso gained ground against the US dollar.
To reach 6,414.27 points, the Philippine Stock Exchange index (PSEi) lost 1.27 percent or 82.23 points.
The All Shares index fell 32.82 points, or 0.97 percent, to end at 3,367.31 points.
Among the sector’s indices, only the Property index saw gains after rising 1.17 percent.
Services experienced the largest decline, at 5.98 percent, followed by the financial sector (0.97 percent), the industrial sector (0.92 percent), holding companies (0.47 percent), and mining and oil (0.05 percent).
1.31 billion shares, or PHP18.72 billion, were traded.
At 123 to 55, decliners outnumbered gainers while 45 shares remained unchanged.
According to Luis Limlingan, head of sales for Regina Capital Development Corporation (RCDC), “local and regional stocks continued their decline as investors struggled to share off recession worries after the Fed (Federal Reserve) upped its forecast for future hikes above previous expectations, saying that it now expects to hike rates to 5.1 percent.”
The updated forecast is expected to further aid in taming the rising inflation rate in the largest economy in the world, which is currently at its four-decade high level. The Fed had previously targeted a rated peak of 4.3 percent for next year.
According to Limlingan, widespread recession fears have also caused oil prices to decline.
West Texas Intermediate (WTI) crude oil futures decreased by 2.4 percent to USD74.29 per barrel and Brent crude oil futures by 2.7 percent to USD79.04 per barrel.
As opposed to this, the local currency increased in value versus the US dollar, completing the day at 55.41 compared to last Friday’s 55.56.
It started the day at 55.5, a significant gain from the previous session’s opening price of 55.85.
It fluctuated between 55.5 and 55.4, averaging 55.439.
Volume was USD627.25 million, down from USD902.27 million the day before.
Michael Ricafort, the chief economist at Rizal Commercial Banking Corporation, attributed the peso’s strength to higher remittance inflows from overseas Filipino workers in time for the Christmas holidays, the government’s approval of the 2023 national budget, and the 2023-28 Philippine Development Plan, as well as the advancement of some proposed measures like increased property valuation and the reform of the passive income tax.
He claimed that the decline in US inflation in November also helped the local currency gain ground.
According to him, the peso has performed similarly to its regional rivals, including the Indian rupee, Indonesian rupiah, Chinese yuan, Malaysian ringgit, and Thai baht.
The peso is expected to fluctuate between 55.30 and 55.50 against the US dollar on Tuesday.
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