By Joann Villanueva
Optimism on the scheduled trade talks between US and China later this week lifted investors’ sentiments and allowed the peso to improve against the US dollar and the main equities index to recover on Tuesday, October 8.
The local currency ended the day at P51.77 from 51.86 against the US dollar a day ago.
BPI Research attributed gains to news citing White House chief economic adviser Larry Kudlow as saying that the US is open for a partial “short term” deal with China if the latter will address some structural issues “at some point.”
“The local unit found additional support late during the session after BSP (Bangko Sentral ng Pilipinas) Governor (Benjamin) Diokno played down the possibility of another rate cut for the balance of the year,” it said.
Diokno said the 175-basis points reduction in the central bank’s key policy rates is enough for now but raised the possibility of further reduction in banks’ reserve requirement ratio (RRR) if inflation slows some more in the last quarter of the year.
Inflation averaged at 2.8 percent in the first nine months this year, which was at the lower end of the government’s 2 percent to 4-percent target.
It has posted slower growth after peaking at 6.7 percent in September and October last year, although a blip was registered last May when rate of price increases posted an uptick to 3.2 percent from 3 percent in the previous months.
For the day, the local currency opened at 51.87 from 51.75 a day ago.
It traded between 51.9 and 51.69, bringing the day’s average to 51.79.
Volume reached USD1.13 billion from USD828.6 million a day ago.
The Philippine Stock Exchange index (PSEi) gained 0.96 percent, or 73.50 points, to 7,756.72 points.
All Shares rose by 0.48 percent, or 22.22 points, to 4,688.39 points.
Most of the sectoral counters ended the day with gains, led by the Mining and Oil at 1.94 points, followed by Holding Firms, 1.80 percent; Industrial, 1.28 percent; Property, 0.23 percent; and Financials, 0.14 percent.
Volume totaled to about 1.12 billion shares amounting to PHP6.95 billion.
Advancers led decliners at 116 to 66, while 51 shares were unchanged. (First published by PNA, Oct. 8, 2019)