THE peso moved closer to hitting its record low and the stock market also fell on Monday as waning prospects of a US-Iran peace deal drove oil prices up.
The currency weakened by a centavo to P60.71 to the dollar, near the P60.748 that was hit at the end of March, and the benchmark Philippine Stock Exchange index (PSEi) shed 42.34 points, or 0.71 percent, and closed the day at 5,901.15.
The peso opened at its intraday trading high of P60.8:$1 and went as low as P60.6. Volume reached P1.409 billion, up from Friday’s P1.383 billion.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso weakened further as crude oil prices increased after US President Donald Trump called off negotiators’ trips to Pakistan, which is mediating peace talks with Iran.
Japhet Tantiangco, research manager at Philstocks Financial Inc., also said that peace talks had weighed on the stock market along with expectations of rising inflation and interest rates.
Regina Capital Development Corp. head of sales Luis Limlingan said investors largely stayed on the sidelines, weighing macroeconomic risks against near-term growth prospects as inflationary pressures persisted.
Trading activity thinned further, with net value turnover dropping to P4.65 billion and foreign investors remaining net sellers with outflows amounting to P677.34 million.
Trading Edge Consultancy chief investment strategist Ron Acoba said the market’s weakness could extend over the next one to two quarters, with banks and conglomerates under pressure from higher borrowing costs and soft earnings growth.
He also pointed to the peso’s continued weakness against the dollar as a factor driving foreign outflows.
Sectoral performance was mixed, with mining and oil stocks leading the gainers, up 1.96 percent, while holding firms posted the steepest decline, falling 1.74 percent.
Market breadth was negative, with 107 decliners against 86 advancers, while 56 issues were unchanged.
Among index stocks, Manila Electric Co. led gainers, rising 2.18 percent to P655.00, while DigiPlus Interactive Corp. was the biggest laggard, dropping 4.58 percent to P14.18.
