Peso, stocks flat as inflation accelerates

Peso, stocks flat as inflation accelerates

MANILA – The Philippine Stock Exchange index (PSEI) ended the week flat while the peso finished sideways against the US dollar due mainly to the within-expected inflation print for February 2021.

The main equities index ended the trade down by 0.02 percent, or 1.12 points, to 6,881.37 points.

All Shares slipped by 0.11 percent, or 4.68 points, to 4,158.54 points.

Half of the sectoral gauges ended the week up, including the Services index, which rose by 1.05 percent; Financials, 0.27 percent; and Property, 0.06 percent.

On the other hand, Mining and Oil fell by 2.45 percent, Industrial by 0.54 percent, and Holding Firms by 0.34 percent.

Volume totaled nearly 4 billion shares amounting to PHP7.73 billion.

Losers led gainers at 135 to 87, while 45 shares were unchanged.

Luis Limlingan, Regina Capital Development Corp. head of sales, attributed the flat close of the main index to the within-expected rise of the domestic inflation rate last February to 4.7 percent from 4.2 percent in January.

“Sentiment was rather cautious throughout most of the trading but turned into bargain hunting as investors assessed the statement of Fed (Federal Reserve) Chairman Jerome Powell,” Limlingan said.

He was referring to the interview during the Wall Street Journal Jobs Summit wherein Powell said economic prospects have improved but the Fed is still far from fulfilling its dual mandate.

Meanwhile, the peso remained strong against the US dollar after ending the day’s trade at 48.56 from its 48.62 close on Thursday.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort identified other factors on Friday’s foreign exchange trading, apart from the acceleration of the domestic inflation rate in February.

Ricafort said these include the end of the government’s retail treasury bond offer, market optimism on the arrival of more coronavirus disease 2019 (Covid-19) vaccines, and the correction of the US stocks markets amid the rise in the 10-year US Treasury bond.

“More Covid-19 vaccine arrivals and rollouts would increase the likelihood of a nationwide MGCQ (modified general community quarantine) sooner, thereby improving market sentiment and the overall economic recovery prospects,” he said.

Ricafort forecast the peso to trade between 48.50 and 48.65 on Monday, and 48.45 and 48.75 next week. (PNA)

Leave a Reply