Philippine stocks drop as peso hits record low

THE Philippine Stock Exchange index (PSEi) declined on Tuesday as investors stayed cautious amid the Middle East war and concerns over the peso’s continued weakness and its inflation impact after last week’s policy rate hike.

The benchmark index fell 0.58% or 34.36 points to close at 5,866.79, while the broader all-share index slipped 0.44% or 14.73 points to 3,320.4.

Tuesday’s close was its weakest since November, reflecting sustained selling pressure across most sectors.

The index opened higher at 5,914.31, but trading turned volatile as it hit an intraday low of 5,833.92 before ending below the 5,900 level.

“The local bourse faltered as investors stayed on the sidelines, waiting for further clarity on the Israel-Lebanon conflict, while digesting the overall impact of last week’s 25-bp (basis point) hike by the BSP (Bangko Sentral ng Pilipinas),” AP Securities, Inc. said in a market note.

Luis A. Limlingan, head of sales at Regina Capital Development Corp., said the peso weakness added to market caution.

“The Philippine market ended lower as selling pressure continues to weigh on equities, driven by the continued peso depreciation to a fresh record above the 61 level against the US dollar,” he said in a Viber message. “The weaker currency heightened inflation and policy concerns, prompting investors to reduce risk exposure.”

The market also remained cautious ahead of upcoming economic data releases, he added.

The peso closed at an all-time low of P61.30 against the dollar, weakening by 59 centavos from the previous session, according to Bankers Association of the Philippines data. It surpassed its prior record low of P60.748 in late March.

Most sectoral indexes ended lower, led by industrials, which dropped 1.32% to 8,718.38. Services fell 0.79% to 2,746.11, property declined 0.62% to 1,941.92 and financials slipped 0.11% to 1,813.42.

On the other hand, mining and oil edged higher by 0.07% to 17,982.36, while holding firms added 0.05% to 4,526.28.

Losers beat winners 117 to 68, while 58 stocks were unchanged.

Market turnover rose to P8.07 billion from P5.36 billion in the previous session, with 1.52 billion shares traded.

Foreign selling widened to a net P878.07 million from P677.34 million on Monday, indicating continued offshore exit from local equities. — Alexandria Grace C. Magno