Peso recovers but PSEi falls again

On Friday, the peso bounced back into 55 peso:$1 territory, but the stock market fell again to close to 6500.

The currency gained 27.5 cents to 55.79 pesos against the dollar, while the Philippine Stock Exchange’s benchmark index (PSEi) lost 30.02 points, or 0.46 percent, to end the week at 6530.20.

The broader All Shares Index capped the decline to 8.71 points, or 0.25 percent, at 3488.08.

“The Philippine Stock Exchange index fell on Friday after the release of stronger-than-expected US economic data, which may support the hawkish signals of some representatives of the Fed (Federal Reserve System) recently,” said Rizal Commercial Banking Corp. said chief economist Michael Ricafort.

“Markets are now fully pricing in another +0.25 Fed rate hike over the next two policy meetings and more than a 50 percent chance that a Fed rate hike could happen as early as June 2023,” he added.

“Additionally, U.S. House Speaker Kevin McCarthy said Republicans in the U.S. Congress and the White House still have work to do before reaching an agreement to avert an impending U.S. default as the U.S. Treasury Department’s cash balance has shrunk to $49.50 billion. May 24, 2023. lowest since 2021.”

Regina Capital Development Corp. Managing director Louis Limlingan noted that U.S. investors continue to “monitor developments in the debt ceiling negotiations, and this also happened against the backdrop of the upcoming rebalancing of Morgan Stanley Capital International.”

The peso opened at 56.03 pesos: $1 and fluctuated between 55.67 and 56.05 pesos. Volume reached $986 million, much lower than the previous session’s $1.673 trillion.

Mining and oil were the only ones to gain in the stock market, climbing 0.15 percent, while all other sectors closed in the red. Services fell the most, at 1.25 percent.

A total of 1.05 billion shares worth 4.55 billion changed hands.

There were more declines than rises, from 98 to 79, while 37 remained unchanged.