Market plunges on inflation, peso woes

MANILA, Philippines — Share prices retreated amid concerns on inflation as well as the peso, which slumped for a second straight trading day to fresh 19-month lows.

The benchmark Philippine Stock Exchange index ended its brief two-day climb as it slipped back below the 6,400 level, plunging by 1.3 percent or 84.32 points yesterday to end at 6,386.42.

The broader All Shares index likewise fell by 0.92 percent or 32.01 points to finish at 3,439.04.

Claire Alviar of Philstocks Financial said the decline reflects negative investor sentiment due to concerns about rising inflation and a weakening peso.

The peso inched down by three centavos to 58.71 from Monday’s 58.68, marking its weakest close since its 58.8 to $1 finish on Nov. 3, 2022.

Year to date, the local unit is now down by P3.34 or 5.7 percent from its end-2023 close of P55.37 versus the greenback.

Data from the Bankers Association of the Philippines, the local currency opened yesterday’s trading session at 58.62 versus the dollar. Its intraday best was at 58.58, while its weakest showing stood at 58.75.

Trading volume inched up by 0.2 percent to $1.317 billion yesterday from $1.315 billion last Monday.

Alviar said inflation for May is seen exceeding the government’s target range of two to four percent, noting that Philstocks’ expectation is at 4.1 percent.

“Philippine shares concluded trading Tuesday in the red following Bangko Sentral ng Pilipinas Governor Eli Remolona’s statement about the potential for cutting the benchmark rate ahead of the Federal Reserve. This suggests ongoing pressure on the peso against the dollar, given expectations that US rates will remain elevated for a longer period,” Regina Capital’s Luis Limlingan said.

At the local market, it was a bloodbath as all sector gauges were in the red, with holding firms suffering the largest drop of 2.5 percent.

Net market value turnover improved slightly from the previous day at P5.74 billion.

Market breadth was negative as decliners pummeled advancers, 128 to 80, while 32 issues were unchanged.