The peso dropped further against the US dollar on Tuesday even as the stock market recovered a bit, with investor sentiment still soured by the weak outlook for China.
The currency closed at P47.44 to $1 on Tuesday, losing 17 centavos from Monday’s P47.27.
It was the weakest since November 5, 2009 when the peso slid to P47.63 against the greenback.
Bargain-hunting, meanwhile, allowed the benchmark Philippine Stock Exchange Index (PSEi) to gain 42.29 points or 0.67 percent to 6,330.55, while the wider All Shares rose by 0.48 percent or 17.49 points to end at 3,645.46.
A day earlier the PSEi lost 4.37%, tracking a regional sell-off traced to fresh data highlighting a weaker Chinese economy.
“The US dollar against the peso was forced higher as risk currencies continued to be bludgeoned on Tuesday,” said Nicholas Antonio Mapa, Bank of the Philippine Islands (BPI) associate economist.
Mapa said the peso tracked a general weakness in Asia as sentiment remained sour despite efforts from China to calm markets.
“Asian currencies took the brunt of the sell-off as majors like the Japan yen and euro managed to gain at the Asian’s expense,” he noted.
The peso opened at P47.24 to $1 at the Philippine Dealing System before trading between P47.19 and P47.45. Total volume transacted rose to P988 million from P582.9 million previously.
At the PSE, meanwhile, all sub-indices except holding firms, and mining and oil posted gains. Total turnover reached P4.7 billion with gainers edging losers, 96 to 77, with 45 issues unchanged.
“The recovery is normal following the steep sell-off,” said April Lynn Tan, research head at COL Financials, Inc.
She noted, however, that the local bourse remained vulnerable to external developments.
Astro del Castillo, president and managing director of First Grade Finance Inc. attributed the stock market uptick to bargain hunters.
“Obviously there has been a relief rally as bargain hunters ruled the day,” del Castillo said.
“These are the reasons why the market recovery is not substantial. The local investors would still mimic their foreign counterparts,” he added.
Lester Azurin, analyst at Unicapital Securities Inc. meanwhile, said volatility should be expected.
“We expect wild swings in prices in the coming days. Clearly, investors are still waiting for good news overseas that would signal market stability in the Philippines,” Azurin said.