Peso improves, stocks trade lower

The stock market remained in the red amid inflation concerns, while the Philippine currency ended the week stronger against the greenback on Friday, according to a report by Manila Times.

The stock market closed the week in the red, extending its losing streak to three days as expectations of hotter headline inflation weighed on sentiment.

By the closing bell, the benchmark Philippine Stock Exchange index (PSEi) had shed 31 points, or 0.47 percent, to end at 6,615.55.

The broader All Shares index likewise declined by 0.18 percent, or 6.41 points, to close at 3,498.17.

Claire Alviar, research associate at Philstocks Financial Inc., said the PSEi continued to drop as investors stayed "cautious" amid "expectations of a higher inflation rate this April."

"Also, investors are awaiting the outlook of the Bangko Sentral ng Pilipinas (BSP) regarding interest rates due to lingering inflationary pressures," she added.

Regina Capital Development Corp. Managing Director Luis Limlingan echoed this view, saying Philippine shares extended losses as traders capitalized on gains following "mounting worries over a potential inflation spike."

Inflation concerns, said Limlingan, were primarily driven by persistent upticks in food prices, particularly rice and meat.

The BSP last Tuesday issued a 3.5- to 4.3-percent estimate for April inflation, fueling worries that consumer price growth could have accelerated further from the 3.7 percent in March and exceeded the upper end of the government's target range.

Foreign investors also contributed to the market's decline, recording a net outflow of P1.29 billion.

Market participation, meanwhile, was weak, resulting in a net market value turnover of P4.26 billion.

Sector indices had mixed results, with mining and oil gaining the most by 1.14 percent, while the property index was the biggest loser, dropping 1.99 percent.

Advancers edged out decliners, 94 against 93, while 55 were unchanged.

Peso ends stronger

Meanwhile, the local currency closed at P57.345 against the dollar, improving by 19 centavos from P57.535 previously, data from the Bankers Association of the Philippines (BAP) showed.

The peso opened trading at P57.40:$1, and ranged from P57.345 to P57.50. Trading volume reached P1.411 billion, lower than the P1.542 billion recorded in the previous session.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said that the peso had strengthened after global crude oil prices posted new 1.5-month lows.

He added that the peso may have also gained due to the slight easing in the outstanding national government debt from record highs.

Bureau of the Treasury data show that national government debt eased to P14.9 trillion in March from a record P15.2 trillion in February this year.

Ricafort added that the peso is also stronger after the dollar index against major currencies fell to a three-week low ahead of the US jobs data report.

The analyst expects the peso-dollar exchange rate to range within the P57.25 to P57.45 levels next week.