Stocks, peso tumble on US-Iran talks uncertainty

MANILA, Philippines — The local stock market took a heavy beating yesterday, dragged down by uncertainty over the US-Iran peace talks and the depreciation of the peso against the dollar.

The benchmark Philippine Stock Exchange index (PSEi) plummeted by 1.64 percent or 100.33 points to close at 6,035.02, while the broader All Shares index plunged by 1.17 percent or 39.69 points to 3,341.08.

“PSEi underperformed regional peers and closed near session lows of 6,018 as uncertainty over the US-Iran negotiations and a fourth day of peso weakness to 61.1 weighed on sentiment,” AB Capital Securities said.

The peso returned to the 61-per-dollar territory yesterday as persistent demand for the greenback from importers and corporates outweighed the local currency’s recent gains.

Data from the Bankers Association of the Philippines showed the peso closed at 61.123 per dollar, down by 34.8 centavos from Friday’s finish of 60.775.

The peso had strengthened to the 60 level last week as markets welcomed signs of easing tensions in the Middle East, with lower oil prices and a softer dollar giving emerging market currencies room to recover.

Monday’s pullback, however, suggests market participants remain cautious as they assess the durability of those gains and the outlook for global interest rates and trade flows.

RCBC chief economist Michael Ricafort, meanwhile, also attributed the local stock market’s drop to the mixed signals on the US-Iran negotiations over the weekend, as well as the mixed signals on the reopening of the Strait of Hormuz.

All sectors were in the red, except for holding firms which advanced by 0.58 percent. Services lost the most with 3.91 percent, followed by industrial with 1.98 percent.

Trading was strong to open the week as total turnover value stood at P10.26 billion.

Decliners pummeled advancers, 116 to 74, while 50 issues were unchanged.