MANILA – The Philippine peso ended the week better against the US dollar but the main stocks index ended in the red due to concerns on the coronavirus disease 2019 (Covid-19) and geopolitical tensions.
The local currency finished the week at 50.06 from its 50.17 close Thursday.
It opened the trade at 50.18, weaker than its 50.06 start a day ago.
It traded between 50.22 and 50.06, resulting in an average of 50.152.
Volume totaled to USD809.02 million, lower than the USD1.17 billion a day ago.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, in a reply to e-mailed questions from PNA, attributed the peso’s strength to the impact of the recent upgrade by Japan Credit Rating Agency (JCRA) of its ratings on the Philippines’ from BBB+ to A-.
He said the local currency has improved by PHP0.135 to a dollar this week while the improvement since the start of the year is about PHP0.575.
He forecasts the peso to range between 49.80 to 50.50 next week.
Among the factors that will come in play next week include developments on coronavirus disease (Covid-19) cases, the report on the government’s fiscal performance for May 2020, the next policy decision of the Bangko Sentral ng Pilipinas (BSP), the geopolitical issues overseas, and US data on new home sales, durable goods orders, and consumer spending.
Meanwhile, the Philippine Stock Exchange index (PSEi) shed 0.53 percent, or 33.38 points, to 6,315.07 points.
All Shares also went down after ending the trade at 3,684.55 points, lower by 0.80 percent or 29.74 points.
Most of the sectors also lost during the day, led by the Services, which declined by 1.58 percent.
Mining and Oil went down by 1.19 percent; Industrial, 0.97 percent; Property, 0.92 percent; and Financials, 0.64 percent.
Only Holding Firms gained during the day after an uptick of 0.13 percent.
Volume totaled to 1.58 billion shares amounting to PHP13.41 billion.
Losers surpassed gainers at 101 to 89 while 54 shares were unchanged.
Ricafort attributed the negative close of the main stocks gauge to profit-taking after a three-day rally.
He said the main index’s close on Friday is “among the lowest in two weeks but still among 3-month highs, as the US and other major stock markets around the world corrected lower after hefty gains to among 3-month highs that were back to pre-COVID-19 lockdown levels recently as more economies around the world further re-open their respective economies from lockdown.”
He said the correction transpired also because of geopolitical issues between China and India, North Korea and South Korea, and the US and China.
“Concerns over risks of new COVID-19 cases in China, some US states, and in some countries that re-opened from lockdowns also partly triggered the healthy profit-taking in the US/global stock markets recently,” he said.
These factors were, however, countered by optimism on the Federal Reserve’s plan to buy corporate bonds as part of its quantitative easing program and the US government’s planned USD1 trillion infrastructure spending.
He forecasts the main index’s immediate support level at between 6,000-6,200 while resistance level is projected to be at 6,600-6,700 levels. (PNA)
