Peso, stock market drop for second day

THE peso fell anew and the stock market retreated to the 6,500 level with latest economic reports said to have dampened sentiment.

The currency weakened by 10 centavos to P55.93 against the dollar, while the benchmark Philippine Stock Exchange index (PSEi) fell by nearly 1 percent, or 64.49 points, to 6,572.51.

The broader All Shares index also closed lower, by 0.84 percent, or 29.57 points, at 3,476.66.

The peso opened trading at P55.97:$1 and ranged from P55.86 to P56.125. Volume rose to P1.737 billion from the previous day’s P1.618 billion.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said a dollar correction and less dovish signals from some US Federal Reserve officials had weighed on the currency.

He added that higher US Treasury yields also put pressure on the peso-dollar rate, which could hit P55.80 to P56 today.

Philstocks Financial Inc. research associate Claire Alviar, meanwhile, said sentiment was dampened by forecasts that Philippine economic growth could fall below targets through 2025 due to high interest rates.

The PSEi also fell, along with most Asian stock markets, after China’s fourth-quarter growth data “fell below expectations at 5.2 percent, lower than the 5.3 percent analysts’ forecast.”

“This further weighed down on sentiment since China is one of our top trading partners,” Alviar said.

Regina Capital Development Corp. Managing Director Luis Limlingan echoed this, saying that local shares continued to decline as China’s growth was “slowest pace in three decades.”

Market participation improved, however, resulting in a net market value turnover of P5.45 billion, better than the P4.91 billion recorded in the last trading day.

All sector indices closed in the red, led by mining and oil, that dropped by 2.02 percent.

Decliners overwhelmed advancers, 108 against 80, while 50 were unchanged.