Peso drops to 55 pesos: $1 but stock market rises

The peso fell to P55:1 on Tuesday, slipping 12 cents, while the stock market rose to the 6700 level after news of lower inflation in February.

The Philippine Stock Exchange’s core index (PSEi) added 34 points, or 0.51%, to close at 6705.12. The broader All Shares index also rose, gaining 17.15 points, or 0.48 percent, to 3,590.21.

Earlier in the day, the government reported that inflation eased slightly to 8.6 percent last month from January’s 14-year high of 8.7 percent.

“Weaker inflation will lessen the likelihood of a 50 basis point rate hike by Bangko Sentral ng Pilipinas (BSP). However, this [inflation] the figure remains high,” said Claire Alviar, a researcher at Philstocks Financial Inc. Apart from the BSP decision on the interest rate, investors also want to see in the coming months whether inflation will continue to decline. Investors are also watching 2022,” she added.

Regina Capital Development Corp. Managing Director Luis Limlingan said: “Philippines stock traded higher as markets welcomed higher-than-expected CPI (Consumer Price Index) data for February, which may indicate that prices have generally peaked.” .

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Rizal Commercial Banking Corp. Chief Economist Michael Ricafort backed this up, stating that “there is a possibility that year-on-year inflation has already peaked or peaked in the first quarter of 2023 and may start to decline gradually thereafter, especially starting in March 2023 and then in the second quarter.” half of this year.

Now that the picture of domestic inflation has been updated, Limlingan said the market could be affected by what Federal Reserve Chairman Jerome Powell says about the state of the US economy: “Mr. Powell will be on deck Tuesday and Wednesday (US time). ) for his testimony in Congress,” he said.

“The market is particularly interested in who the chairman of the Fed is.[man] would say regarding the direction of the US economy, as well as signals for an interest rate adjustment, Limlingan added.

The peso opened at 55.03 pesos: $1 and fluctuated between 54.99 and 55.15 pesos. Volume reached $896 million on Tuesday, up slightly from $810 million in the previous session.

On the stock market, all sectors, except for holdings (minus 0.32%), closed in positive territory. Industrial enterprises led the growth with growth of 1.57%.

Transaction volume increased to 1.82 billion shares worth 5.5 billion pesos from just under 660 million a day earlier.

The Progressives beat the decliners 102 to 84, while 48 remained unchanged.