LAST-MINUTE buying of select blue-chip stocks kept the stock market afloat on Tuesday, with the benchmark index narrowly avoiding another decline.
The Philippine Stock Exchange index (PSEi) closed at 6,264.70, up 2.90 points, or 0.05 percent, after trading in negative territory for much of the session.
Philstocks Financial Inc. research manager Japhet Tantiangco said bargain hunting toward the close helped push the market into positive territory as investors remained wary after a 60-day ceasefire between the US and Iran ended.
The market was also weighed down by weaker remittance growth and softer Wall Street performance, Regina Capital Development Corp. head of sales Luis Limlingan said.
The peso, meanwhile, fell further against the greenback, closing the day weaker by 29 centavos at P61.785.
US moves awaited
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the currency weakened as “markets awaited possible unprecedented US economic measures or sanctions against Iran as early as this week, with peace talks or a deal remaining elusive.”
Trading remained subdued with net value turnover at P5.69 billion. Foreign investors were net sellers, recording P403.64 million in outflows.
Market breadth was slightly negative, with 100 gainers against 102 decliners, while 53 issues were unchanged.
Mining and oil stocks led the sectoral gains, climbing 1.58 percent, while holding firms slipped 0.18 percent.
Rate differential boost
In a related development, Metrobank Research said a continued US Federal Reserve pause and Bangko Sentral ng Pilipinas (BSP) rate hike could potentially lift the peso.
“However, given the current weak domestic economic backdrop, local investors should mirror global strategy by sticking to short-term local bonds and favoring defensive equity sectors,” it said in a note.
Metrobank Research said markets remained divided over the next move of the US central bank, with futures pricing in a 25-basis-point rate hike before the end of the year.
However, it added there was still a compelling case for the Fed to keep rates unchanged for longer as it weighs a slowing labor market against still-elevated inflation.
The outlook, it said, is significant for emerging-market currencies such as the peso because the interest rate differential can influence the attractiveness of peso-denominated assets.
Metrobank Research economist Nicholas Antonio Mapa told The Manila Times that while Fed moves were less of a factor today, “the probable widening of the interest rate differentials could still lend some support to the local unit.”
“The peso could remain at the P61:$1 level this year,” he added.
