NextGen Day

On Thursday, the main stock index partially recovered due to falling oil prices, but the peso recorded another new low over the US dollar.

The PSEi, which measures activity on the Philippine Stock Exchange, rose by 39.66 points, or 0.61 percent, to 6,593.74 points.

All Shares increased by 0.43 percent, or 15.13 points, to 3,505.20 points in the following period.

The majority of sectors counters saw gains throughout the day, including Property (1.04%), Industrial (1%), Holding Firms (0.45%), and Financials (0.36%).

Services fell by 0.35 percent, while Mining and Oil experienced a 0.52 percent decline.

With 674.59 million shares changing hands for PHP5.25 billion, volume remained low.

With 99 to 88 in favor of decliners, 48 shares were unchanged.

Luis Limlingan, head of sales at Regina Capital Development Corporation (RCDC), said, “Philippine equities recovered on softening rates and oil prices, which outweighed fears over growing inflation.”

According to Limlingan, Brent crude oil futures fell by 5.2 percent to USD88 per barrel, and West Texas Intermediate (WTI) fell by 5.69 percent to USD81.94 per barrel as oil prices fell to their lowest levels in seven months.

He claimed that the “Beige Book,” the Federal Reserve’s report of the state of the economy, “showed that economic activity was barely changed in many places across the US.”

The local currency, which on Wednesday had dropped to a new low versus the US dollar, ended the day flat at 57.18, down from 57.135.

It traded between 57.22 and 57.06 throughout the day after opening at 57.07. For the day, the average level was 57.14.

Volume decreased from USD1.23 billion to USD1.15 billion from the previous day.

According to Michael Ricafort, chief economist at Rizal Commercial Banking Corporation (RCBC), the local unit fell for the sixth day in a row after the release of the gross international reserves (GIR) data for August 2022, which showed a two-year low of USD98.97 billion.

According to Ricafort, continuous increases in the Bangko Sentral ng Pilipinas (BSP) rate are anticipated in order to “help stabilize both the peso exchange rate and overall inflation.”

He claimed that rising US Treasury yields also indicate expectations for a similar trend in the Federal Reserve’s key interest rates to address the CPI’s four-decade high.

According to Ricafort, the 10-year Treasury yield is still 3.26 percent, which is a 2.5-month high. This “also recently bolstered sentiment on the US currency in terms of greater US interest rate income.”

During the day, he continued, hawkish signals from Federal Reserve officials and data from the Beige Book “signaling high prices and tight labor markets impacting on US economic prospects for the next year, but observed that inflation showed indications of decelerating” also had a role.

According to Ricafort, the peso would fluctuate between 57.05 and 57.25 to the US dollar on Friday.

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