Philippine stocks retreat as weak peso pressures investor appetite

Traders Union
All News
Stocks
Philippine stocks retreat on weak peso

Highlights

Philippine Stock Exchange index falls 1.87% to 5,653.55 and all shares index drops 0.97% to 3,182.69, led by weak peso and profit-taking.
Value turnover decreases to P7.89 billion from P9.52 billion, with net foreign selling of P683.60 million versus the previous session's net buying of P509.91 million.
Brent crude futures rise 1.2% to $115.24 a barrel amid Saudi refinery attack, intensifying inflation and peso depreciation concerns for Philippine equities.

Market decline and trading drivers

As reported by BusinessWorld Online, the Philippine Stock Exchange index falls by 1.87%, or 107.64 points, to 5,653.55 on Wednesday, while the broader all shares index loses 0.97%, or 31.27 points, to 3,182.69.

Regina Capital Development Corp. Head of Sales Luis A. Limlingan says investors turn to profit-taking after Tuesday’s gains, while caution persists because of the local currency’s sharp weakness. Philstocks Financial Inc. Research Manager Japhet Louis O. Tantiangco says inflation concerns move to the forefront as higher global oil prices, driven by renewed attacks on Saudi refinery facilities, combine with the peso’s weakness and elevated long-term Treasury yields to make stocks less attractive.

Five of six sectoral indices close lower. Services drops 2.95% to 2,912.41, financials loses 2.07% to 1,787.30, holding firms slips 0.84% to 4,242.48, industrial declines 0.69% to 7,357.90, and property falls 0.69% to 1,793.97, while mining and oil rises 0.41% to 18,583.99.

Decliners outnumber advancers, 105 to 70, with 68 stocks unchanged. Value turnover decreases to P7.89 billion from P9.52 billion in the previous session, and net foreign selling reaches P683.60 million after net buying of P509.91 million a day earlier.

Peso, oil and inflation pressures

The peso rises by 14.5 centavos to P64.025 against the U.S. dollar, halting a seven-day slide that had taken the currency to fresh record lows. Even with that rebound, concerns over imported inflation and weaker purchasing power continue to weigh on market sentiment.

President Ferdinand R. Marcos, Jr. says the government will do all that it can to arrest the peso’s slide, which he links to a broadly stronger greenback and the global oil price shock caused by tensions in the Gulf area. The Bangko Sentral ng Pilipinas says it does not target a specific exchange rate and intervenes only to smooth sharp swings that could become disruptive and inflationary.

Oil prices rise after an attack on a refinery in Saudi Arabia, the world’s biggest crude exporter, renews concern over supply risks in the Middle East. Brent crude futures are up 1.2% at $115.24 a barrel, adding to the pressure on inflation expectations and local equity valuations.

In our earlier article on Philippine shares rebounding despite the peso hitting record lows, we noted that bargain hunting lifted the PSEi after early weakness even as currency pressure kept investors cautious. We also highlighted a brief return of net foreign buying and pointed out that market sentiment remained sensitive to peso moves and broader macro and geopolitical developments.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.