THE stock market plunged and the peso also slipped back into P58:$1 territory as investors reacted to renewed conflict in the Middle East.
The Philippine Stock Exchange composite index (PSEi) shed 184.41 points, or 2.79 percent, while the peso weakened by 53 and a half centavos to P58.2 against the dollar.
The currency opened at P57.85 and traded between P57.85 and P58.2 during the session. Volume reached P2.244 billion, up from Friday’s P1.503 billion.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso weakened after the US and Israel launched strikes on Saturday against Iran, which retaliated by targeting Arab states hosting US assets.
The conflict escalated on Monday after Israel hit Lebanon after attacks by Hezbollah.
Ricafort noted that uncertainty over how long the conflict could last had pushed crude oil prices to new eight-month highs, which will lead to higher domestic pump prices and add to inflation.
Luis Limlingan, head of sales at Regina Capital Development Corp., said the renewed peso weakness had dampened confidence. He added that some investors rotated into commodity-backed safe haven assets like gold and oil.
Philstocks Financial Inc. research manager Japhet Tantiangco, meanwhile, said the PSEi’s sharp decline reflected heightened risk-off sentiment as investors trimmed exposure amid geopolitical uncertainty.
Trading remained active with net value turnover at P7.50 billion while foreign investors were net sellers, offloading P784.64 million.
Among sectors, only mining stocks posted gains, rising 0.10 percent as investors sought defensive exposure in precious metal-related equities.
Services suffered the steepest losses, falling 4.11 percent.
Market breadth was negative, with 159 decliners outnumbering the 53 advancers and 52 unchanged issues.