THE peso nearly fell back to the P56:$1 level on Monday while the stock market hit an over two and a half year high, tracking regional movements on Monday in the wake of last week’s jumbo Federal Reserve rate cut.
The currency weakened by 28 centavos to close at the day’s high of P55.97 against the dollar, joining other Asian currencies that slipped as the greenback stayed above the one-year low hit after the US central bank kicked off an easing cycle by announcing a 50-basis point cut.
The peso opened at P55.67:$1 and ranged from P55.67 to P55.97. Volume hit P1.386 billion, down from Friday’s P1.671 billion.
The benchmark Philippine Stock Exchange index (PSEi), meanwhile, surged by 2.27 percent, or 164.93 points, to end the day at 7,417.25 — its strongest close since Feb. 22, 2022’s 7,440.91.
The broader All Shares added 62.40 points, or 1.60 percent, to 3,958.02.
Investors were said to have continued to cheer the Bangko Sentral ng Pilipinas’ (BSP) announcement that bank reserve requirements would be cut beginning October 25 and prospects of continued policy easing.
An analyst warned, however, that the rally would not be sustained.
“The benchmark index continued its very bullish momentum to close at its highest level since February 2022 on the back of the BSP’s significant reduction of the reserve requirement ratio and strong foreign fund flows,” China Bank Capital Corp. Managing Director Juan Paolo Colet said.
“The market is technically overbought and we expect a pullback very soon,” he added.
Philstocks Financial Inc. senior research analyst Japhet Tantiangco said that trading was strong with net value turnover registering P8.27 billion, higher than year-to-date average of P5.12 billion.
“Foreigners were net buyers with net inflows amounting to P1.77 billion,” he noted.
Regina Capital Development Corp. Managing Director Luis Limlingan, meanwhile, indicated that data releases later this week would weigh on the market’s performance.
“In the US, the durable goods report on Thursday and the core PCE (personal consumption expenditures) inflation report on Friday will be closely monitored for inflation signals,” he said, adding that several Fed officials were also set to speak and potentially provide insights into monetary policy.
“Locally, the 3Q24 business and consumer confidence surveys on September 23 will precede the August budget balance report on September 25,” he added.
Except for mining and oil, which lost 0.01 percent, all other sector indices ended the day in the green. Financials rose the most by 3.69 percent.
Gainers outnumbered decliners, 121 to 93, while 52 were unchanged.
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