Stocks fell Tuesday and the Philippine peso fell beyond the 56-a-dollar mark on growing concerns over elevated crude prices and possible more interest rate hikes by the US Federal Reserve.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, lost 40 points, or 0.63 percent, to close at 6,464.72 amid thin trading Tuesday as all six subsectors retreated.
The broader all-share index went down 18 points, or 0.52 percent, to settle at 3,471.52 on a value turnover of P3 billion. Losers overwhelmed gainers, 114 to 61, while 55 issues were unchanged.
Only two of the 10 most active stocks ended in the green. Metropolitan Bank & Trust Co. gained 1.92 percent to P58.40, while Manila Electric Co. added 0.31 percent to finish at P320.00.
Asian markets also mostly fell Tuesday, even as data showed China’s economy grew far more than expected in the first quarter after activity resumed following three years of painful zero-Covid measures.
The blockbuster 4.5 percent expansion, helped by above-forecast retail sales last month, revived optimism for an economic recovery in the country after its worst performance in decades last year.
Investors continue to fret over Federal Reserve plans to hike interest rates as officials try to rein in US inflation, with top policymakers seeming to be split over how many more increases are needed.
Shanghai, Tokyo and Jakarta rose but Hong Kong, Sydney, Seoul, Singapore, Wellington, Mumbai, Taipei and Bangkok were all negative.
Focus now turns to the release of fresh US earnings this week from big-ticket names including Bank of America, Morgan Stanley, Johnson & Johnson, Netflix, Tesla, Ericsson and Nokia.
Meanwhile, the peso on Tuesday fell to a three-and-a-half-month low against the US dollar on higher global crude oil prices and the tempered growth of overseas Filipino remittances recently.
The local currency lost 29 centavos to close at 56.14 against the US dollar from 55.85 on Monday. It was its weakest level since it settled at 56.2 on Dec. 28, 2022. Total volume turnover reached $1.417 billion, up from $1.374 billion previously.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the weaker peso could lead to higher import prices and overall inflation.
“The peso [is] also weaker after global crude oil prices lingered among 2.5-month highs more than two weeks after the unexpected oil production cut of more than one million barrels per day as announced by OPEC+,” Ricafort said.
“The peso also weakened recently more than a week after the end of seasonal increase in OFW remittances and conversion to pesos during the long Holy Week,” he said.
Latest data from the Bangko Sentral ng Pilipinas showed that cash remittances in February 2023 posted its slowest growth in seven months amid the slowdown in global economic activities and the risk of recession in the United States.
Money sent home by overseas Filipinos rose 2.4 percent to $2.57 billion from $2.51 billion in the same month last year. It was the slowest expansion since 2.3 percent in July 2022.
Ricafort said the dollar/peso exchange rate also continued to correct higher after the PSEi corrected lower. With AFP