Stocks drop on weakening peso

MANILA, Philippines — The continuing weakness of the peso against the dollar pulled down share prices yesterday. 

The benchmark Philippine Stock Exchange index (PSEi) slipped by 0.63 percent or 43.14 points to end at 6,806.86. 

Also finishing the session in negative territory was the broader All Shares index, declining by 0.40 percent or 15.20 points to settle at 3,796.54.

“The peso’s weakness against the dollar, continuously testing the 59 level, weighed on the market,” Philstocks Financial research manager Japhet Tantiangco said.

The peso returned to the 59 to $1 mark yesterday, depreciating by one centavo from its 58.99 to $1 finish on Monday. 

The local currency opened at 58.98 to $1. Its intraday best stood at 58.95 before it lost steam and hit its worst showing of 59. 

Trading volume went down from $1.06 billion to $872.8 million yesterday. 

RCBC chief economist Michael Ricafort said markets reacted to President Trump’s announcement that he would impose an additional 10 percent tariff rate on US imported goods from China and 25 percent on all imported products from Mexico and Canada. 

The peso also weakened due to “local political noises since the weekend,” Ricafort said.

Meanwhile, China Bank Capital Corp. managing director Juan Paolo Colet said that also among the factors which caused the PSEi’s decline were the sustained net foreign selling as well as the below average value turnover ahead of the October print of the US Personal Consumption Expenditures Price Index, the preferred inflation gauge of the Federal Reserve. 

Net value turnover was thin at P3.83 billion. Foreigners were net sellers with net outflows amounting to P556.57 million.

All sectors were in the red except for financials, which managed to increase by 0.54 percent.

Services took the biggest hit, plunging by 2.68 percent.

Market breadth was negative as decliners crushed advancers, 110 to 82, while 43 issues were unchanged.