MANILA - Both local equities and the peso saw declines on Thursday following the announcement of an off-cycle policy rate hike.
According to a new release by the Philippines News Agency, the Philippine Stock Exchange index (PSEi) dropped by 0.60 percent to 6,018.49, after a brief recovery the previous day from a five-day losing streak. The broader All Shares index also recorded a 0.62 percent decline to 3,266.02, with all sectoral indices showing losses.
Mikhail Plopenio, research and engagement officer at Philstocks Financial, Inc., attributed the negative sentiment among investors to the off-cycle 25 basis points hike in the benchmark interest rate by the BSP, as well as the lower closing of Wall Street due to higher US Treasury yields. Plopenio noted that concerns over the ongoing conflict in the Middle East are also keeping many investors on the sidelines.
The net market turnover for the day was reported at PHP2.9 billion, which is lower than the year-to-date average of PHP5.05 billion. Foreign investors were net sellers, with net outflows amounting to PHP319.07 million.
Meanwhile, the peso closed at 56.96 to a US dollar, weaker than the previous day's closing rate of 56.85. It opened the day at 56.96 compared to the previous day's opening rate of 56.75, trading between 56.96 and 56.90 to the dollar throughout the day. The average exchange rate for the day stood at 56.96 to a US dollar. The volume of trade increased to USD1.08 billion from USD909.7 million.