Stocks slide as peso nears 59 a dollar
The main stocks index declined anew on Wednesday amid United States recession worries but the peso was little changed despite touching the 59-level against the US dollar mid-trade, according to a report by Philippine News Agency.
The Philippine Stock Exchange index (PSEi) dipped further to 5,879.68 points, down by 2.33 percent or 140.39 points.
All Shares followed with a decline of 2.12 percent, or 68.59 points, to 3,165.64 points.
The Mining and Oil index posted the biggest drop among the sectoral gauges with 3.93 percent.
It was trailed by Holding Firms, 3.20 percent; Property, 2.47 percent; Industrial, 2.32 percent; Services, 1.99 percent; and Financials, 0.73 percent.
Volume was thin at 815.83 million shares amounting to PHP6.79 billion.
Decliners surpassed advancers at 156 to 49, while 39 shares were unchanged.
“Philippine shares continued falling on climbing rates and global recession fears, with other regional indices falling deeper into the bear market,” said Luis Limlingan, Regina Capital Development Corporation (RCDC) head of sales.
Limlingan said the Dow Jones Industrial Average slipped by 0.43 percent to 29,134.99 and the S&P 500 went down by 0.21 percent to 3,647.29.
However, he said the Nasdaq Composite inched up by 0.25 percent to 10,829.50.
Limlingan said oil prices rose “on the back of supply curbs in the US Gulf of Mexico ahead of Hurricane Ian and a softer dollar.”
Brent crude oil prices increased by 2.6 percent to USD86.27 per barrel and the West Texas Intermediate (WTI) by 2.33 percent to USD78.50 per barrel.
Meanwhile, despite touching 59.02 against the US dollar mid-trade, the local currency finished the day at 58.98 from its all-time low of 58.99 on Tuesday.
It opened the day at 58.95, weaker than its 58.8 start in the previous session.
It traded between 58.88 and 59.02, resulting in an average of 58.99.
Volume rose to USD1.197 billion from USD1.062 billion a day ago.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort, in a reply to questions from the Philippine News Agency, said the local currency posted a correction “after Malacañang said President (Ferdinand) Marcos (Jr.) is closely monitoring the peso exchange rate on a regular basis and (is) coordinating with the economic team amid (the) peso’s impact on inflation.”
Ricafort said the local currency has weakened by PHP7.98 or 15.6 percent against the US dollar since the start of this year after ending 2021 at 50.999.
“(This) could lead to higher prices of imports and overall inflation, thereby would increase (the) possibility of further local policy rate hikes, even a surprise/off-cycle local policy rate hike to help stabilize the peso as well as overall inflation,” he said.
Ricafort said, “local monetary authorities signaled possible surprise/off-cycle local policy rate hike/s, more intervention in the local foreign exchange markets, both of which could help stabilize the peso exchange rate, as well as overall inflation.”
He forecasts the peso to trade between 58.85 to 59.05 to a US dollar on Thursday.
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