THE peso closed at its record low of P61.75 to the dollar on Wednesday and the stock market also plunged as continued hostilities in the Middle East weighed on investor sentiment.
The currency traded within a very narrow range — P61.73 to P61.75 — and ultimately ended the day weaker by half a centavo. Volume reached P1.268 billion, markedly up from P752.5 million in the previous session.
Reyes Tacandong & Co. senior adviser Jonathan Ravelas warned that the peso could fall further and noted that the dollar had strengthened amid “elevated crude oil prices as US and Iranian attacks escalated, renewing inflation concerns.”
“Expect the currency to range P61.6 to P61.9 levels in the near term,” he said.
A trader also said the peso weakened after the United States stepped up its attacks on Iran, but added that it could recover today due to profit-taking.
The benchmark Philippine Stock Market index (PSEi), meanwhile, shed 65.95 points, or 1.04 percent, to 6,267.85.
Philstocks Financial Inc. research manager Japhet Tantiangco said profit-taking in International Container Terminal Services Inc. (ICTSI) weighed heavily on PSEi, while a continued rise in crude oil prices and the peso’s slide further dampened sentiment.
Trading activity softened, with net value turnover amounting to P5.77 billion as investors largely stayed on the sidelines. Foreign investors were net sellers, unloading a net P655.00 million worth of shares.
Luis Limlingan, head of sales at Regina Capital Development Corp., said the peso depreciation prompted investors to lock in gains, pushing the benchmark below the 6,300 level.
“Attention is likely to remain on currency movements and broader market conditions in the near term,” he said.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the market’s decline reflected concerns over increased inflation risks brought about by higher fuel prices, rising borrowing costs and an upcoming Metro Manila minimum wage hike.
Mining and oil was the best-performing sector, gaining 1.30 percent, while services posted the steepest decline at 3.01 percent.
Market breadth remained negative, with 89 gainers, 105 losers and 48 unchanged issues.
