THE Philippine Stock Exchange index (PSEi) fell for a third straight day on Monday, closing at 6,006.55, down 0.86 percent, as investor concerns over the ongoing war in the Middle East weighed on sentiment.
The Middle East conflict also weighed down on the peso, pushing it to a new record low against the US dollar.
Rising oil and energy prices, and the weaker peso have heightened fears of higher near-term inflation, prompting cautious trading and broad-based selling across sectors.
Only the services sector managed a slight gain of 0.17 percent, while miners recorded the largest decline at 4.58 percent.
Luis Limlingan, head of sales at Regina Capital Development Corp., said the market barely held above the 6,000 mark as elevated oil prices and geopolitical tensions continue to pressure investors.
Despite central bank intervention to support the peso, traders remain defensive, wary of further downside if key support levels break, Limlingan added.
Trading activity remained subdued, with total net value turnover at P5.88 billion, net of extraordinary block sales. Foreign investors were net sellers with outflows of P400.15 million.
Japhet Tantiangco, research manager at Philstocks Financial Inc., said that rising fuel and energy costs, and peso weakness are driving concerns about higher inflation.
Hence, investors continue to adopt a cautious stance, limiting upside momentum.
Only two index counters gained for the day, which are International Container Terminal Services Inc., which rose 1.46 percent, and DMCI Holdings Inc., up 0.41 percent, while DigiPlus Interactive Corp. was the worst performer, falling 5.66 percent to P18.00.
Peso hits new record low
For its part, the local currency further weakened on Monday, hitting a new record low amid the continued tensions in the Middle East.
The peso closed at P59.87:$1, down by 13 and a half centavos from the previous close of P59.735.
It opened at P59.71 and traded between P59.7 and P59.95 during the session. Trading volume reached P1.805 billion, down from the previous P2.227 billion.
Reyes Tacandong & Co. senior adviser Jonathan Ravelas said the peso slipped again as the uncertainty surrounding the war keeps investors cautious.
“Expect the currency to trade within the P59.60-P59.90 levels in the near term, as uncertainty persists,” he added.
A trader also noted that reports of a bombing on Kharg Island have pushed both the dollar and global crude oil prices higher.
“With the Fed likely to sound hawkish in this week’s policy meeting, the rate might be constrained sideways along current levels,” the trader said.
