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PSEi breaks winning run on rate rise concerns; peso nearly flat

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On Thursday, concerns over a rate hike caused the local market index to stop rising, but the peso experienced a decline versus the US dollar.

To reach 6,609.27 points, the Philippine Stock Exchange index (PSEi) dropped 1.52 percent, or 102.22 points.

All Shares fell 36.47 points, or 1.02 percent, to 3,549.19 points after that.

Each sectors index finished the day in the red, with Property leading the pack with a 2.86 percent decline.

Following it were Holding Companies (1.69%), Mining and Oil (1.42%), Services (0.80%), Industrial (0.63%), and Financials (0.49%).

A total of 880.58 million shares, worth PHP4.99 billion, were traded.

At 105 to 72, decliners outnumbered advancers, while 52 shares remained unchanged.

The head of sales for Regina Capital Development Corporation (RCDC), Luis Limliingan, stated that “traders processed fresh job market data” and remarks made by Federal Reserve Chair Jerome Powell, who informed US lawmakers of the need to raise the key interest rates of the central bank more than initially planned.

The Philippine Statistical Authority (PSA) stated earlier in the day that the jobless rate decreased from 6.4 percent in February of last year to 4.8 percent in February of this year.

According to the ADP National Employment Report, the US private sector added 242,000 jobs in February, demonstrating the strength of the greatest economy in the world.

Oil demand outpaced a larger-than-expected draw in US crude reserves, according to Limlingan, who also attributed the decrease in oil prices to “more aggressive US interest rate hikes that impact economic growth.”

West Texas Intermediate (WTI) crude oil prices fell by 1.3 percent to USD76.59 per barrel while Brent crude oil futures fell by 0.9 percent to USD82.55 per barrel.

The local currency managed to maintain a sideways movement against the US dollar throughout the day, finishing at 55.24 vs 55.32 the day before.

It started the trading session at 55.25 and fluctuated between 55.29 and 55.14. For the day, the average was 55.238.

Volume decreased from USD1.02 billion the day before to USD926.3 million.

According to Michael Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC), the depreciation of the US currency, news that the country’s unemployment rate improved in February 2022, and China’s one-year-low inflation rate of 1% for February 2023 all supported the peso.

He claimed that these elements allayed concerns about further increases in the Federal Reserve’s benchmark interest rates, which are anticipated to rise in the wake of Powell’s testimony before US lawmakers.

On Friday, Ricafort anticipates that the peso will fluctuate between 55.20 and 55.40 versus the US dollar.

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