Weak peso drags local stocks

MANILA, Philippines — The local stock market tumbled yesterday as peso weakness dampened investor sentiment.

The benchmark Philippine Stock Exchange index (PSEi) plummeted by 1.7 percent or 106.36 points to finish the session at 6,158.34.

The broader All Shares index likewise tumbled by 1.29 percent or 44.47 points, settling at 3,396.35.

Luis Limlingan of Regina Capital said the weaker currency weighed on market sentiment, while broad-based selling reflected continued investor caution.

“The local bourse ended lower as investors reacted to the peso’s depreciation, which nearly touched the 62-level against the greenback, raising concerns over inflation and borrowing costs,” Limlingan said.

The peso flirted with the 62 to $1 level after hitting an intraday low of 61.995 yesterday, beating the previous record closing of 61.846 on July 24.

“Global market weakness also weighed on sentiment, adding to the pressure on local equities,“ Limlingan added.

All sectors were in the red, with the services index taking the biggest hit with a 2.68-percent plunge, followed by mining and oil which lost 2.6 percent.

Market breadth was negative as decliners squashed advancers, 119 to 74, while 54 issues did not change hands.

Total turnover value reached P5.78 billion, almost similar to the previous day’s value.

AB Capital Securities said net foreign selling accelerated to P232 million, but gross foreign buying remained healthy and was in-line with its 30-day median, suggesting foreign demand has not disappeared despite the correction.

“For the PSEi to stabilize, the peso would need to recover and the other heavyweights would need to pick up the slack,” AB Capital said.

ICTSI was the most actively traded stock, dropping by 3.38 percent to P930 per share, followed by SM Investments and BDO Unibank, which fell by 2.07 percent and 1.93 percent, respectively, to P568 and P122.10.