Stocks index dips ahead of ghost month but peso improves

Stocks index dips ahead of ghost month but peso improves

MANILA – The local equities index declined ahead of the ghost month and the two-week enhanced community quarantine (ECQ) implementation in the National Capital Region (NCR) in August, but the peso improved to the 49-level against the greenback.

The Philippine Stock Exchange index (PSEi) shed 3.48 percent, or 226.3 points, to 6,270.23 points.

All counters also ended in the negative territory, with All Shares down by 2.65 percent, or 107.17 points, to 3,934.86 points.

The Property index registered the highest drop at 4.98 percent, followed by Holding Firms, 3.31 percent; Financials, 2.99 percent; Industrial, 2.32 percent; Services, 1.80 percent; and Mining and Oil, 0.68 percent.

Volume reached 1.81 billion shares amounting to PHP6.27 billion.

Losers led gainers at 159 to 47, while 42 shares were unchanged.

“Investors sold off to close the weekend and the month to clean their portfolios ahead of the ghost month of August, while others kept to cash to assess the impact of reverting back to ECQ (enhanced community quarantine) after a week,” said Luis Limlingan, Regina Capital Development Corp. head of sales.

The Palace on Friday announced heightened restrictions in the NCR, among other areas, starting this week, with the ECQ scheduled for two weeks from August 6 to 20.

In the US, second quarter 2021 gross domestic product (GDP) rose by 6.5 percent year on year, slightly better than the revised 6.3-percent expansion in the previous quarter.

Meanwhile, the peso improved against the US dollar after ending the day at 49.97 from 50.305 the previous day.

It opened the day at 50.285 and traded between 50.34 and 49.97 for an average of 50.223.

Volume totaled USD1.36 billion, higher than the previous session’s USD993.8 million.

Rizal Commercial Banking Corp. (RCBC) chief economist Michael Ricafort partly attributed the peso’s strength to the ECQ since it would reduce economic activities, “thereby could somewhat reduce the demand for US dollars to pay for imports.”

Ricafort said the peso’s major resistance level is at 50 to a dollar to date but its minor support level is at 49.40 to 50.

He added that the US dollar recently weakened due in part to the dovish statement from the Federal Reserve, which earlier said interest rates would remain near zero as recovery remains fragile. (PNA)

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