Local share prices and the peso closed lower Thursday as traders flocked to safe-haven assets amid a potential US debt ceiling deadlock.
The Philippine Stock Exchange index was down 55.73 points, a 0.84 percent drop to 6,560.22.
The broader all shares index was down 28.57 points or 0.81 percent to 3,496.79.
Losers edged gainers 113 to 53 with 59 stocks unchanged. Trading turnover reached P3.95 billion.
The peso closed at 56.065 to the dollar, down from 55.77 on Wednesday. The currency opened at 55.79, hitting a high of 55.74 and a low of 56.11. Trading turnover reached $1.64 billion.
Asian currencies were in a sombre mood while the Indonesian rupiah remained unmoved after its central bank kept rates unchanged, Reuters reported.
This was the fourth consecutive meeting in which policy rates were kept unchanged. Bank Indonesia (BI) Governor Perry Warjiyo said core inflation was seen staying within target range and headline inflation was seen returning to target in the third quarter.
“We believe this is a single step toward a dovish stance from BI,” said Fakhrul Fulvian, an economist at Trimegah Securities. “If the current situation is to be maintained, we believe BI to start its interest rate cut cycle by August or September this year.”
The Indonesian rupiah, which was down 0.4 percent, remained unchanged, hovering around its lowest level since early April.
Earlier in the day, data showed Singapore’s economy shrank 0.4 percent on a quarter-on-quarter seasonally-adjusted basis, a reversal from the 0.1 percent growth in the fourth quarter of 2022.
The Singapore dollar depreciated 0.3 percent, eyeing losses for a fourth straight session.
“We keep Singapore’s GDP growth at 2 percent in 2023, with recovery momentum likely to be observed in the second half of the year,” said Barnabas Gan, senior economist at RHB Singapore.
Elsewhere in Asia, the Malaysian ringgit was the top laggard among peers. It slid 0.6 percent, eyeing its seventh straight session of losses and holding near mid-November lows.
Analysts at Maybank attributed this to China’s weak recovery and falling commodity prices, among others.
The Philippine peso and Thai baht skidded 0.6 percent and 0.2 percent, respectively.
The Chinese yuan slipped 0.2 percent on account of the widening US-China trade and technology dispute.
“The key reasons for such weakness have been the lacklustre leading economic data out from China and the ‘inaction’ of People’s Bank of China to implement more accommodative monetary policies,” said Kelvin Wong, senior market analyst, Asia Pacific at OANDA.
Globally, investor sentiment remained weak given the lack of progress on raising the US government’s $31.4 trillion debt ceiling ahead of a June 1 deadline.
Additionally, the Commerce Department’s April personal consumption expenditure index reading, the Fed’s preferred inflation gauge, is due on Friday.
Claire Alviar, analyst at Philstocks Financial Inc., said the market tracked the overnight drop in Wall Street as concerns about the US debt ceiling persists. This was further exacerbated by a statement from Fitch Ratings placing the US’s AAA rating on negative watch.
“Given the ongoing concerns in the US, many investors were still on the sidelines,” she said.
Most actively traded SM Prime Holdings Inc. was steady at P34. Ayala Corp. was down P8 to P691.50. SM Investments Corp. was down P13 to P916. Jollibee Foods Corp. was up P4 to P234. BDO Unibank Inc. was down P1 to P135. Century Pacific Food Inc. was down P1.50 to P22.50. International Container Terminal Services Inc. was down P1.40 to P200. Bank of the Philippine Islands was down P2 to P103. Ayala Land Inc. was down P0.40 to P26. PLDT Inc. was down P31 to P1,228. – Ruelle Castro, Reuters
