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Before the US debt talks, stocks declined as the peso gained.

The main index of the local stock exchange dropped on Tuesday as investors awaited news on the United States debt ceiling negotiations. At the same time, the peso strengthened as Fitch Ratings revised its outlook from negative to stable on the Philippines’ investment grade rating.

The PSEi, which measures performance on the Philippine Stock Exchange, dropped 17.27 points, or 0.26 percent, to 6,603.56 points.

Most of the other counters lagged behind it, with All Shares dropping 6.61 points, or 0.19 percent, to 3,527.42 points.

Among the sectoral indices, industrial saw the largest dip, falling by 0.64 percent.

Mining and oil accounted for 0.57 percent of the total, followed by services (0.33 percent), holding companies (0.29 percent), and financials (0.27 percent).

After increasing by 0. 40%, the only indicator to increase during the day was the Property index.

1.16 billion shares, or PHP6.04 billion, were traded.

At 105 to 80, decliners outnumbered gainers, while 44 shares remained unchanged.

The negotiations between the White House and US politicians regarding the plan to lift the debt ceiling were the subject of the PSEi decline, according to Luis Limlingan, head of sales for Regina Capital Development Corporation (RCDC).

According to him, hawkish remarks from some Federal Reserve officials caused the price of spot gold to fall by 0.1 percent and the price of US gold futures to fall by 0.2 percent, respectively.

As opposed to this, oil futures increased “amid the rise in US gasoline futures and forecasts for oil demand to accelerate in the second half of 2023.”

West Texas Intermediate (WTI) crude oil prices increased by 0.6 percent to USD71.99 per barrel, while Brent crude oil prices increased by 0.5 percent to USD75.99 per barrel.

The local currency’s closing value versus the US dollar was 55.725, up from the previous day’s finish of 55.82.

Michael Ricafort, the chief economist at Rizal Commercial Banking Corporation (RCBC), partially attributed the improvement to Fitch Ratings’ positive rating action on the BBB credit rating of the Philippines.

The debt rater attributed its choice to the strong post-pandemic recovery of the domestic economy, the nation’s solid external payments position, and the excellent economic policy framework of the government.

The peso opened trading at 55.7 and fluctuated between 55.75 and 55.57 during the day. The level was 55.671 on average.

Volume increased from USD981.5 million the day before to USD1.19 billion.

According to Ricafort, the peso will fluctuate between 55.60 and 55.80 on Wednesday.

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