PHILIPPINE shares fell sharply on Friday, with the benchmark index dropping to its lowest level in more than three months, as expectations of monetary tightening following the US Federal Reserve’s rate hike weighed on investor sentiment, with the peso also slightly weakening against the dollar.
Analysts said rising local bond yields and concerns over higher energy costs further dampened buying, with the Philippine Stock Exchange index (PSEi) ending the day down 102.73 points, or 1.72 percent, to close at 5,855.91.
This was the PSEi’s lowest close since July 1, according to Michael Ricafort, chief economist at Rizal Commercial Banking Corp.
The decline came a day after the US Federal Reserve raised its policy rate by 25 basis points to a target range of 3.75 percent to 4.0 percent, fueling expectations that the Bangko Sentral ng Pilipinas (BSP) could follow suit to maintain interest-rate differentials and help stabilize the peso.
Philstocks Financial Inc. research manager Japhet Tantiangco said rising local treasury yields weighed on equities as short-term yields increased on expectations of a possible BSP rate hike, while longer-term yields rose amid higher inflation expectations.
“The rise in treasury yields make[s] stocks less attractive,” Tantiangco said, adding that elevated global oil prices and peso weakness also weighed on the market.
Luis Limlingan, Regina Capital Development Corp. head of sales, said strong selling pressure emerged following the FTSE Philippines rebalancing, while investors remained cautious amid expectations of a significant increase in domestic fuel prices next week.
Investors are continuing to monitor the potential impact of higher energy costs on companies’ operating expenses and broader market sentiment, Limlingan said.
Trading remained active, with net value turnover reaching P15.10 billion. The broader market ended with 117 decliners, 79 gainers, and 43 stocks unchanged.
Among sectors, miners were the only gainers, rising 1.65 percent. Services posted the steepest decline at 2.53 percent.
ACEN Corp. led the gains among index stocks, climbing 9.13 percent to P2.87, while Semirara Mining and Power Corp. plunged 10.42 percent to P17.96.
Ricafort said the PSEi’s immediate support was now at the 5,800 psychological level, followed by the 5,766.82 low recorded on May 29.
Meanwhile, the peso slightly weakened against the US dollar, closing at P62.749 from P62.73 on Thursday.
Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the peso remained under pressure amid the ongoing conflict in the Middle East. He sees the local currency trading within the P62.70 to P62.90 range in the near term.
