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Peso strengthens, PSEi slips

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The local bourse ended the month in the negative territory as investors looked forward to more economic data releases from the United States but the peso regained its footing against the greenback.

For the fourth consecutive day, the Philippine Stock Exchange index (PSEi) slipped and ended the day at 6,556.20 points, down by 0.65 percent or 43.14 points.

All Shares followed with a drop of 0.14 percent, or 5.08 points, to 3,527.17 points.

Half of the sectoral gauges also finished with declines namely Holding Firms, 2.36 percent; Property, 1.41 percent; and Services, 0.09 percent.

On the other hand, Financials rose by 1.61 percent, Industrial by 1.43 percent and Mining and Oil by 0.35 percent.

Volume reached 1.74 billion shares amounting to PHP21.18 billion.

Advancers surpassed decliners at 117 to 80 while 40 shares were unchanged.

Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales, said PSEi was affected partly by the earnings reports by listed firms and the Morgan Stanley Capital International (MSCI) rebalancing, with the latter resulting “in a bloodbath.”

Limlingan said investors are also awaiting the December 2022 report on S&P Case Shiller 20-City Home Price Index and consensus estimate is -0.4 percent.

Oil prices also slipped “as market participants anticipate a more aggressive monetary policy stance from the Fed (Federal Reserve) which could slow economic growth and oil demand.”

Meanwhile, the local unit strengthened against the US dollar and finished the day at 55.33 from the previous day’s 55.51.

It opened the day at 55.35, a tad weaker than its 55.25 start on Monday.

It traded between 55.36 and 55.1, resulting in an average of 55.21.

Volume reached USD1.20 billion, lower than the previous day’s USD1.33 billion.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the local unit posted correction due in part to the weakening of the US dollar, the better-than-expected US pending home sales and durable goods orders excluding transportation, which would support further hikes in the Fed rates.

He said the US pending home sales in January 2023 rose by 8.1 percent month-on-month while durable goods orders inched up by 5.1 percent from last December.

Ricafort said the drop of oil futures to among its three-week lows also supported the peso since this “could still help ease inflationary pressures and also help in narrowing the country’s trade deficit.”

For Wednesday, the local unit is expected to trade between 55.25-55.45 against the US dollar.*PNA

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