Peso keeps sliding, PSEi snaps gains

0

The Philippine peso continued its slide on Friday while the stock market snapped a four-day winning streak, with analysts noting that investors were wary of taking on risk given rising global concerns.

Advertisements

The local currency, which hit an intraday low of P51.63 to the dollar, closed the day down 14 centavos to P51.49, a new near 11-year low. It was the peso’s weakest finish since it settled at P51.60:$1 on August 24, 2006.

“The peso has been hit by risk-off trades in global financial markets, as investors have become nervous that [United States] President [Donald] Trump is losing political support for his reform agenda, which could setback plans for US corporate tax cuts,” IHS Markit Asia Pacific chief economist Rajiv Biswas said.

Biswas said investors were shifting allocations away from growth assets such as Asian equities and currencies into the US dollar, the euro and fixed income.

“As a result, the PHP has fallen further against the USD. Meanwhile the deterioration in the Philippines current account has also acted as a drag on the PHP during recent weeks,” he added.

The peso first touched the P51:$1 level on August 11, weighed down by a war of words between the United States and North Korea.

The Philippine Stock Exchange index (PSEi), meanwhile, took its cue from US declines that were triggered by concerns of Trump’s ability to govern. Regional markets also fell on news of terror attacks in Spain.

The bellwether index lost 56.02 points or 0.69 percent to settle at 8,016.73. The wider All Shares declined 26.05 points or 0.55 percent to finish at 4,734.84.

COL Financial chief technical analyst Juanis Barredo said the local bourse’s performance was due to US market drops “that rippled through to Europe and Asia.”

Overnight, the Dow Jones declined 1.24 percent, the S&P 500 retreated 1.54 percent and the tech-heavy Nasdaq Composite fell 1.94 percent.

“We were really due for a correction. Also, it took sell off in Dow Jones … which was the excuse to take profit,” First Grade Finance, Inc. Managing Director Astro del Castillo said.

IB Gimenez Securities research head Joylin Telagen said risk-off sentiment prevailed due to the attacks in Spain.

Second-quarter growth figures released on Thursday were “just as expected and earnings results are … nothing spectacular,” Telagan said.

“But technical-wise, [the]index is just consolidating at 8,000. Just one big positive news could break the all-time high,” she added.

“Specifically, we’re looking the tax reform to underpin the stock market in the long term, around 8,200 to 8,500. Downside risk is at 7,800.”

All sectoral indices, except industrials, closed in the red..

Volume turnover reached 1.3 billion shares valued at P5.4 billion.

Losers led winners, 107 to 74, while 58 issues were unchanged.

ANGELICA BALLESTEROS

Share.
loading...
Loading...

Please follow our commenting guidelines.

Comments are closed.