Peso gains anew vs dollar; PSEi returns to 6,200 level

THE peso gained anew, and the stock market climbed back to the 6,200 level on Tuesday following favorable data from abroad, analysts said.

The currency strengthened by 16 centavos to P55.39 against the dollar while the benchmark Philippine Stock Exchange index (PSEi) added 25.20 points, or 0.41 percent, to end the day at 6,208.83.

The broader All Shares rose by 0.28 percent, or 9.28 points, to 3,314.60.

The stock market bucked declines elsewhere in the region and in Europe.

China Bank Capital Corp. Managing Director Juan Paolo Colet said investors went bargain-hunting, spurred by “a relatively benign market environment, an overnight rally in US shares and a favorable auction of 20-year US Treasuries.”

“The 6,200 to 6,250 area is a strong resistance zone, so we need to see more buying at these levels to build a case for a fresh rally,” he added.

Philstocks Financial Inc. research associate Claire Alviar and Regina Capital Development Corp. Managing Director Luis Limlingan both also said that the bourse rebounded due gains on Wall Street.

Alviar added that local sentiment was further boosted by news that the country had posted a balance of payments surplus in October.

She said this indicated potential support for the peso, “which has been gaining strength recently against the US dollar.”

Limlingan, meanwhile, said investors were keeping an eye out for the Tuesday, US time, release of the minutes of the Federal Reserve’s October 30 to November 1 policy meeting.

“Traders are hoping to glean some insight into policymakers’ rate decisions and learn what it might take for them to change tack going forward,” he added.

The US central bank kept interest rates unchanged following the meeting but warned that further tightening could not be ruled out.

The peso, meanwhile, opened at the day’s high of P55.43:$1 and traded as low as P55.34. Volume reached P1.599 billion, slightly higher than the P1.511 billion recorded in the previous session.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that the dollar had weakened against major global currencies.

A continued easing trend in US Treasury yields also contributed to the peso’s gain, he added.

At the stock market, sectoral results were mixed with industrials down the most by 0.70 percent and financials — up 1.01 percent — leading gainers.

Volume thinned from the previous day to just over 422.55 million shares worth some P3.9 billion.

Decliners edged out advancers, 86 to 80, while 43 were unchanged.