Philippine financial markets down on Fed

MANILA, Philippines — The Philippines’ financial markets ended Wednesday on a negative note, with the Philippine Stock Exchange index crashing to the 7,600 level, and the peso plunging to a fresh 12-year low against the dollar.

The PSEi, a barometer of investor confidence, dropped 2.17 percent or 168.32 points to close at 7,602.98 on Wednesday, with investors back in the market following the Independence Day holiday on Tuesday.

The broader all-shares index fell by 1.60 percent or 75.19 points to 4,629.35 while all sectoral counters were engulfed in a sea of red.

Sought for comment, Luis Limlingan of Regina Capital Development Corp. said all eyes are on the upcoming central bank meetings, with the Federal Reserve expected to raise key rates this week.

“With rise appetite increasing for US markets increasing, the opposite was the case for the Philippines,” Limlingan said, adding that US stock-market indexes closed mostly higher on Tuesday as investors shifted their attention away from the landmark US-North Korea Summit to the start of a series of important central bank meetings.

“The peso slid further, making the local market even less attractive, hence prompting the massive exodus today,” he also said.

The peso on Wednesday slumped to P53.23 against the greenback, 28 centavos weaker than the P52.95-per-dollar finish last Monday.

This is the local currency’s weakest level since June 2006.

DBS Bank Ltd. of Singapore earlier said the peso will likely depreciate further to P54 to $1 by the end of 2018 on the back of accelerating inflation and widening trade gap.