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THE peso fell sharply on Thursday, closing to a fresh nine-month low
ahead of the release of the June inflation data.
At the Philippine Dealing System, the local
currency closed at 45.50 to the dollar, down from Wednesday’s
finish at 45.20. Trading volume reached $568.50 million.
Traders said the concerns over rising oil prices
in the world market also weighed on the local currency, especially
after crude hit a fresh record of $145 per barrel.
Metropolitan Bank and Trust Co. (Metrobank) said
the Bangko Sentral ng Pilipinas (BSP) was seen selling at 45.20 to
cap the rally, adding the central bank is expected to smoothen
volatility.
Metrobank said dollar bulls went on a rampage as
the bounce in oil prices overnight saw the greenback rallying and
decisively breached the P45 psychological level.
“Dollar upside bias to continue given
underlying risks, despite the generally weak greenback on signs of a
sagging US economy,” it said in a note to clients.
Other factors to consider, the bank said, are
the rise in the price of oil as US inventories fall and, the slump
in stocks that pushed the Dow into a bear market on new signs of
weakness in both the economy and for corporate profits.
The BSP earlier said inflation last month is
expected to hit from 10.4 percent to 11.2 percent, the highest in
nearly a decade.
A trader said falling equities and growing risk
aversion also pushed the peso to the low end.
At the Philippine Stock Exchange, share prices
closed 2.3 percent lower to a fresh 22-month trough.
The composite index shed 54.06 points to
2,339.84, after touching 2,289.21 in mid-session.
After a fifth straight session of retreat, it
finished Thursday at its lowest level since September 1, 2006 when
it ended at 2,329.44.
In the broader market, losers outnumbered
gainers 95 to 18, while 36 stocks ended unchanged.
Turnover rose to P4.57 billion from P2.4 billion
on Wednesday.
A technical glitch towards the session’s close
delayed the release of closing share prices.
Dealers said record-high crude prices heightened
worries over surging inflation and its impact on economic growth and
corporate profits.
“Should we expect a recovery soon? I don’t
think so. We’re in an oversold position, so there would be some
trading opportunity,” Nestor Aguila of DA Market Securities told
Dow Jones Newswires.
“But overall, the major trend is still down.
Investors should wait for the market’s complete decline before
seriously entering the market.”
Traders expect the index’s next support at
2,200 points or about 39.3 percent below the market’s level at the
end of calendar 2007.
“Oil is the ghost that will keep haunting the
market. Expect corporate earnings to fall as inflation takes its
toll,” said Astro del Castillo of First Grade Holdings.
Ayala Land Inc. fell 30 centavos to P8.40 while
Philippine Long Distance Telephone Co. shed P25 to P2,330.
San Miguel Corp. A and B shares ended unchanged
at P40 each.
-- Chino S. Leyco and AFP
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