Stocks fall on weaker peso
Local share prices slumped yesterday after the peso weakened further versus the US dollar.
The Philippine peso hit a low of P56.45 versus the US dollar before closing at P56.37.
The benchmark Philippine Stock Exchange Composite index (PSEI) closed at 6,349.94, down 38.7 points or 0.61 percent while the broader All Shares slipped by 11.87 points or 0.35 percent to end at 3,409.91.
The sectoral gauges were mixed with holding firms, services and property down and mining and oil, financials and industrial closing in positive territory.
Claire Alviar, research analyst at PhilStocks Financial, said investors took some gains amid the continued weakening of the peso and the wider trade deficit reported in May amounting to $5.678 billion.
“Given that the weakening peso will have an inflationary risk at home, this negatively affects investors’ sentiment, especially amid the rising inflation. Moreover, negative sentiment from the US also spilled over to the Asian markets, including the Philippines.
Total value turnover reached P4.187 billion. Market breadth was positive, 105 to 82 while 49 issues were unchanged.
Asian shares mostly fell yesterday after a slump on Wall Street erased recent gains. US futures and oil prices also declined.
Investors are on the lookout this week for updates on inflation and corporate profits, while renewed coronavirus outbreaks are adding to jitters. Shares fell in Tokyo, Seoul, Hong Kong and Shanghai, but rose in Sydney.
Adding to the pessimism, Hong Kong authorities announced they are considering restricting movements of people infected with COVID-19, as well as overseas arrivals, a system similar to what’s already in place in mainland China.
The highest inflation in four decades is pushing the Federal Reserve and other central banks to hike interest rates, which puts the clamps on the economy and hurts various types of investments.