Peso, stocks fall anew on China data, Fed hike talk

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The stock market and the peso both fell on Tuesday following news of weak China inflation and mounting anticipation of a US Federal Reserve rate hike next month.

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The peso lost 10 centavos to close at P47.26 against the dollar, while the benchmark Philippine Stock Exchange index (PSEi) declined by 0.99 percent or 70.08 points to 7,000.11. The All Shares index also fell by 0.94 percent or 38.21 points to 4,040.86.

Jonathan Ravelas, BDO chief market strategist, said a stronger dollar had weighed on domestic markets.

“Prospects of US rate hike is causing a stir on the dollar. Same reason observed on equities,” he said in a text message.

“Stocks are seen to test 6,800 to 6,900 levels, while the US to Philippine peso exchange rate is seen to try 47.50 in the near term,” he added.

Astro del Castillo, managing director of First Grade Finance Inc., said that disappointing “new data from China” continued to raise concerns about the growth of the global economy.

China inflation eased to 1.3 percent in October, missing a 1.5-percent consensus forecast and heightening concerns
of a slowdown.

Del Castillo said final third quarter financial results due this week from listed firms “could reverse the trend or soften the blow, if positive.”

All stock market sub-sectors declined, led by financials that went down by 1.36 percent.
Total volume traded reached 533.57 billion shares, valued at P6.3 billion. Decliners outnumbered advancers by far, 128 to 39, while 48 issues did not move.

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