NextGen Day

On Thursday, the Federal Reserve’s benchmark rates increased by another 75%, and there were hints that there may be other rate increases in the months to come.

To reach 6,156.11 points, the Philippine Stock Exchange index (PSEi) lost 0.81 percent, or 50.13 points.

The All Shares index fell next, by 0.59 percent, or 19.18 points, to 3,257.83.

The majority of sectoral gauges—Holding Firms, 1.73 percent; Industrial, 1.03 percent; Property, 0.76 percent; and Financials, 0.57 percent—also ended the day in the red.

Services saw an increase of 1.27 percent, while Mining and Oil saw an increase of 1.96 percent.

430.75 million shares, or a meager PHP4.45 billion, were traded.

At 114 to 61, decliners outnumbered gainers while 37 shares remained unchanged.

The major index’s decline following the most recent Federal Reserve rate hike, according to Regina Capital Development Corp. head of sales Luis Limlingan, is consistent with that of its regional counterparts.

The gains were reversed when Fed Chair Jerome Powell said it was “premature” to talk about a rate hike pause and that the terminal rate would probably be higher than previously estimated, he said. Initially, the indices were up during the day.

Investors are anticipating economic figures on the US non-farm payrolls for October 2022 and the domestic inflation rate for the month on Friday.

According to Limlingan, the nation’s inflation rate in October likely topped 7%.

Last September, when it increased to 6.9 percent, the country’s rate of price increases reached its highest level since October 2018, reversing a previous month’s deceleration to 6.3 percent.

As of today, the average inflation rate was 5.1 percent, far higher than the government’s goal range of 2 to 4 percent until 2024.

In the meantime, the value of the local currency decreased from the previous day’s closing of 58.47 to 58.80 to the US dollar.

It slid from Wednesday’s 58.05. opening price to 58.40 on Thursday.

The range of its trades, from 58.87 to 58.30, raised the day’s average price to 58.66.

Volume increased from USD844.15 million on Wednesday to USD847.7 million today.

The chief economist of Rizal Commercial Banking Corp. Michael Ricafort said the increase in the amount of government debt outstanding also damaged the peso during the day in addition to the effect of the Fed rate hike.

The national government’s liabilities increased to a record high of PHP13.517 trillion as of September 2022, according to the Bureau of the Treasury.

According to Ricafort, the peso will fluctuate on Friday between 58.65 and 58.85 to the US dollar.

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