Peso continues to rise, PSEi recovers as fears ease

On Friday, the peso rose again, and the stock market rebounded on news that lifelines were stretched out to distressed financial institutions.

The currency gained 15 cents to close at 54.71 pounds against the dollar, while the Philippine Stock Exchange’s benchmark index (PSEi) jumped 64.81 points, or 1.01 percent, to 6469.72.

The broader All Shares index added 0.59%, or 20.45 points, to 3464.27.

Claire Alviar, a researcher at Philstocks Financial Inc., said the recovery was due to easing bank fears following bailouts from First Republic Bank and Credit Suisse.

Credit Suisse received $54 billion from the Swiss central bank after a major investor said it could not provide additional funding, while First Republic received $30 billion from major US banks.

The lifeline was triggered by the successive bankruptcies of two regional US banks, Silicon Valley Bank and Signature Bank, over the weekend.

“Foreigners also supported the market,” Alviar added, “recording a net inflow of 14.81 million pesos.”

“On the chart, support remains at 6400 and resistance is pegged at 6600,” she continued.

“Net turnover by market value was also strong at 7.02 billion pesos, higher than this month’s average of 5.83 billion pesos.”

Rizal Commercial Banking Corp. Meanwhile, Chief Economist Michael Ricafort said PSEi “has corrected higher after its biggest budget surplus in nearly four years with tighter current account and balance of payments deficit estimates and higher GIR (gross international reserve) estimates for Bangko Sentral ng Pilipinas.”

“One more thing to note is that the European Central Bank raised its main refinancing rate by 0.50% to 3.50% in line with market estimates as Credit Suisse fears about the crisis eased,” he added.

The peso opened at $54.75:1, the high of the day, and traded at $54.61. Volume reached $880 million, slightly higher than the $799 million registered on Thursday.

On the stock market, all sectoral indices ended the week in positive territory, led by the growth of financial indicators by 1.75%.

Just under 1.02 billion shares worth 8.5 billion pesos changed hands.

There are more advancers than decliners, from 102 to 79, while 57 remained unchanged.