THE stock market and the peso hit one-month lows on Wednesday as an escalating conflict in the Middle East fueled fears of higher inflation and prolonged global instability
The Philippine Stock Market index (PSEi), which had regained some ground on Tuesday after plunging by 2.79 percent at the start of the trading week, succumbed anew and shed 137.1 points, or 2.1 percent, to 6,307.84.
It was the benchmark index’s lowest close since Feb. 2’s 6,297.08.
The broader All Shares also fell, by 2.03 percent or 72.09 points, to 3.485.62.
The peso, meanwhile, weakened by 13-and-a-half centavos to P58.57 against the dollar, the lowest since Feb. 6’s P58.643:$1 and extending a run of declines to five days.
It opened at P58.5 versus the greenback and traded in the P58.45 to P58.649 range. Volume reached P1.774 billion, down from Tuesday’s P1.926 billion.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the local financial markets fell on concerns that sharp increases in local pump prices could push inflation higher, especially if the war on Iran drags on.
Outcomes moving forward, he added, will largely depend on how long the Iran conflict affects global oil prices and broader financial markets, with volatility expected to persist as investors monitor developments in the Middle East.
All sectoral indices fell, with mining and oil down the most by 6.37 percent.
Just 35 listed firms advanced on Wednesday, a little less than a fifth of the 179 that declined. Fifty-eight, meanwhile, closed the day unchanged.