The stock market returned to the 7000 level and the peso rose further against the dollar on Monday for a strong start to the trading week.
The benchmark Philippine Stock Exchange Index rose 93.94 points, or 1.35 percent, to close at 7,045.48, the highest level since April 20, 2022, which is 7,142.42 points.
The broader all shares rose 1.03 percent, or 37.53 points, to 3,675.15.
Meanwhile, the peso rose by 31 and a half centavos to 54.575 pesos to the dollar. It last closed stronger on 23rd June 2022 at P54.70: $1.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said the currency rallied after news of the annual growth in Overseas Filipino Workers (OFW) remittances and the continued decline in the US dollar against other major global currencies.
The central bank reported on Monday that personal remittances from overseas workers reached $2.93 billion in November, an improvement from $2.77 billion a year earlier.
Meanwhile, Claire Alvear, a researcher at Philstocks Financial Inc, said the rise in PSE followed expectations that the US Federal Reserve would be less aggressive in raising interest rates after inflation slowed in the US.
“The peso’s appreciation against the dollar lifted the market as well,” Alvear added.
In addition, net market turnover was also strong on Monday at 9.57 billion pesos.
Louis Lemlingan, managing director at Regina Capital Development Corp. , “Philippine stocks touched the 7000 level after several months as foreign funds continued to bet on our economy recording net foreign inflow of 1.08 billion pesos.”
“Moreover, the conviction remained high that the country will be among the best performers in 2023,” he added.
The index was supported by upbeat overseas investor sentiment and strong rises in BDO Unibank (up 5.6 percent) and SM Investments (up 4.3 percent), said Rastin Mercado, head of research at Bank of China Securities.
Mercado added, “The recent market movement also confirms the index’s exit from the one-and-a-half-month consolidation phase, and indicates the continuation of its upward trend from the lowest level in October.”
However, intraday price action indicated strong selling pressure towards the close as investors took profits after three consecutive days of gains. This could continue over the next few sessions, with prices likely to test the immediate support level at 6850.
The peso opened at a high of 54.90 pesos for the day and traded as low as $54.475:1. The total volume was $1,272.5 billion, less than $1,368.8 billion in the previous session.
In the equity market, sectoral results mixed with services (-0.10%) and mining and oil (-0.69%) closing in the red. Financials recorded the largest gain, at 2.80 percent.
1.107 billion shares were traded, at a value of 10.23 billion pounds.
The winners outweighed the losers, 138 to 65, while 46 remained the same.