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US GDP declines, PH equities fall, and the peso rises.

On Friday, the main equity index stopped rising due to weaker US second-quarter growth, although the peso appreciated against the US dollar.

To reach 6,315.93 points, the Philippine Stock Exchange index (PSEi) lost 0.99 percent, or 63.33 points.

To reach 3,398.82 points, All Shares decreased by 0.76 percent, or 26.14 points.

The majority of industry indexes likewise ended in the red, lead by Holding Firms, which fell by 2.38 percent.

Industrial, with 1.96 percent, Mining and Oil, with 0.21 percent, and Property, with 0.07 percent lagged it.

Financials increased by 0.39 percent, while Services increased by 0.63 percent.

With 566.04 million shares trading for PHP18.05 billion, volume is still quite low.

At 116 to 74, decliners outnumbered advancers while 50 shares remained the same.

According to Luis Limlingan, head of sales for Regina Capital Development Corporation (RCDC), “Philippine shares were sold to conclude the month after multiple bargain hunting sessions, as they were concerned of the poor US GDP (gross domestic product) figure.”

Following a -1.6 percent print in the previous three months, the US recorded a second quarter increase of -0.9 percent, which was less than the 0.3 percent expansion that had been anticipated.

According to Limlingan, “The Fed (Federal Reserve) made the markets wager that it would reduce its aggressive raising campaign because of the downturn in GDP.”

In the meantime, the local currency strengthened against the US dollar and ended the day at 55.13 instead of Thursday’s 55.82.

It traded between 55.75 and 55.05. It started the day at 55.75.

For the day, the average level was 55.322.

Volume increased to USD1.58 billion from USD1.27 billion in the prior session.

Michael Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC), noted that the local unit finished at its highest level in more than three weeks, or since July 4, 2022, when it closed at 55.08.

He claimed that the US dollar’s decline following the US economy’s slower-than-expected performance, which “may already foreshadow risk of recession,” was to blame for the peso’s rise.

He continued, saying that the initial jobless claims numbers for the US are similarly not promising.

According to him, the decline in oil prices to their roughly three-month low on the global market also helped to boost the peso during the day.

The peso is expected to trade between 54.90 and 55.20 on Monday next week, with a predicted level of 54.80 to 55.40 for the entire week.

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