Local bourse down 0.63%




The Manila Times


Business Times

THE local bourse declined further by 39.98 points on Thursday to settle at 6,301.71 as the Federal Reserve (Fed) raised interest rates by 75 basis points (bps), which brought negative sentiment to the market. In relation to this, the Bangko Sentral ng Pilipinas also hiked rates by 50 bps to fight surging inflation. “The Fed’s decision brought most equity markets into the red, especially with the expectation that they will remain aggressive for the rest of the year. At home, the BSP’s 50-basis-point rate increase could help the peso but high policy rates may temper the demand,” Claire Alviar, research associate at Philstocks Financial Inc., explained. “The Philippine Stock Exchange index (PSEi) also declined as the peso weakness, despite the latest 0.50 local policy rate hike to 4.25 percent, could lead to higher import prices and overall inflation, as the peso already depreciated by 14.7 percent since the start of 2022,” Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said in his analysis. “The US dollar-peso exchange rate went up for the 3rd straight day to close at a new record high of 58.49, after earlier posting a new intraday record high of 58.50,” said Ricafort. Regina Capital Development Corp. Managing Director Luis Limlingan, meanwhile, pointed out that during its two-day Federal Open Market Committee meeting and as mentioned earlier, the Fed declared a well-expected 75-bp-rate hike and pledged to keep its hawkish stance in pushing the interest rates to combat inflation until it reaches a terminal rate of 4.6 percent in 2023. On the economic front, the latest data on weekly jobless claims is expected Thursday, US time. The Fed rate hike also affected oil prices as it closed lower as this recent action could slow economic activity and demand for oil. Brent crude futures shed 0.9 percent, closing at $89.83 per barrel. On the other hand, the US WTI crude closed at $82.94 percent, down 1.2 percent, its lowest since Sept. 7, 2022. Thursday’s net market value turnover was at P5.62 billion, with a total volume of 641,939,112 shares, with 66,921 trades made. Banks were the sole gainer, up by 0.69 percent, as it may benefit from the rising interest rates. However, the property sector, which is vulnerable to the changes in the policy rate, declined the most, dropping by 2.80 percent. Decliners edged advancers at 156 to 41, while 34 issues were unchanged.