NextGen Day

The peso and the local bourse’s counters closed in the negative on Tuesday due to hawkish indications from Federal Reserve officials.

The Philippine Stock Exchange index (PSEi), which had gained ground earlier in the week, dropped 1.25 percent, or 82.49 points, to 6,510.67 points.

All Shares fell 35.36 points, or 1.01 percent, to 3,475.05 points afterward.

Mining and Oil saw the largest decrease among the sector’s counters, falling by 2.02 percent.

The sectors behind it were Industrial (1.56%), Financials (1.33%), Services (1.29%), Holding Firms (1.05%), and Property (0.91%).

1.11 billion shares, or PHP4.46 billion, were traded.

At 127 to 42, decliners outnumbered gainers, while 43 shares remained unchanged.

Michael Ricafort, the chief economist of Rizal Commercial Banking Corporation (RCBC), attributed the main index’s performance partly to the Fed’s hawkish signal, markets pricing in a potential rate hike in July, increased US Treasury yields, and daytime peso weakness.

According to Ricafort, the PSEi has fallen by 0.8 percent, and the next significant support level is 6,510.

The peso dropped from its Monday night close of 56.12 to 56.31 against the US dollar.

The local currency depreciated from its start of 55.85 to 56.07 at the beginning of the day.

It fluctuated between 56.44 and 56.05, averaging out at 56.26.

Volume increased from USD1.11 billion the day before to USD1.39 billion.

According to Ricafort, the peso’s close was comparable to that of its regional rivals partly because of anticipation of a Fed rate increase in either June or July and higher US Treasury yields, which lessen the appeal of other currencies.

On Wednesday, he expects the peso to fluctuate between 56.20 and 56.40 to the US dollar.

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