Stocks index declines; peso steady vs. US dollar

Stocks index declines; peso steady vs. US dollar

MANILA – The Philippine Stock Exchange index (PSEi) registered a correction Thursday while the peso remained firm against the greenback.

After a three-day rally, the local stock barometer shed 1.60 percent, or 106.54 points, to 6,545.17 points.

All other counters trailed the main index, with All Shares down by 1.15 percent, or 46.30 points, to 3,998.64 points.

Holding Firms registered the biggest drop among the sectoral counters after it fell by 2.47 percent.

The Property index slipped by 1.79 percent; Services, 0.69 percent; Industrial, 0.50 percent; Mining and Oil, 0.36 percent; and Financials, 0.19 percent.

Volume totaled 3.52 billion shares amounting to PHP5 billion.

Losers led gainers at 110 to 89, while 54 shares were unchanged.

Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort said the main equities index posted correction “partly due to delays in the scheduled arrivals of Covid-19 (coronavirus disease 2019) vaccine doses into the country from April-June 2021 amid tight global supply.”

He said investors’ expectations “of another extension in the quarantine restrictions, either ECQ (enhanced community quarantine) or eased to MECQ (modified enhanced community quarantine), in view of the scheduled end of the two-week ECQ in NCR Plus on April 11, 2021” also affected the PSEi.

NCR Plus covers the National Capital Region (NCR) and the provinces of Bulacan, Rizal, Laguna, and Cavite.

Despite the PSEi’s drop, Ricafort said the main gauge “still gained week-on-week (up for the second week in three weeks) by 102.08 points or 1.6 percent.”

He said the main index’s major support level over the last five months remains at 6,400, which helps prevent further downward correction towards the 6,000 to 6,200 levels, which have been strong support levels since the fourth quarter of 2020.

Ricafort forecasts PSEi’s immediate resistance to between 6,600 to 6,700 levels “which are the next hurdles prior to further upside potential in the near future.”

Meanwhile, the peso maintained its sideways close against the US dollar after finishing the trade at 48.54 from 48.585 Wednesday.

It opened the day at 48.64 and traded between 48.66 and 48.5.

The average level for the day stood at 48.579.

Volume amounted to USD659.28 million, higher than the previous session’s USD581.8 million.

Ricafort said the peso continues to remain generally firm against the US dollar partly due to the drop in imports to its eight-month low last February and the “narrowest trade deficit in three months, thereby reflecting less demand for US dollars to pay for imports.”

He said other factors include the latest sharp year-on-year decline in manufacturing volume of production data which could also signal slower importation, the one-year reduction in import duties for pork, and the correction in global oil prices at one-month lows, the benchmark 10-year US Treasury yield to one-week lows and US dollar to new two-week lows against major global currencies.

Ricafort forecasts the peso’s next support level between 48.30 and 48.40. (PNA)

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