Share prices ended lower Monday as continued profit-taking hit the market.
The peso closed down.
The Philippine Stock Exchange index (PSEi) was down 38.03 points, a 0.55 percent drop to 6,838.76.
The broader all shares index was down 10.21 points or 0.28 percent to 3,642.96.
Gainers edged losers 101to 99 with 39 stocks unchanged. Trading turnover reached P6.6 billion.
The peso closed at 54.76 to the dollar, down from 54.42 on Friday.
The currency opened at 54.50, an intraday high and hit a low of 54.87. Trading turnover reached $955.85 million.
Asia’s emerging market currencies struggled to gain momentum on Monday, as investors were cautious ahead of a crucial US inflation data that could re-shape the rhetoric for interest rate hikes globally, Reuters reported.
Ahead of Tuesday’s consumer price index (CPI) report, revisions to the previous data set showed consumer prices rose in December instead of falling as previously estimated. That lifted core inflation on a three-month annualized basis to 4.3 percent from 3.1 percent.
The dollar index climbed 0.1 percent to hit its highest level in one week on firming bets that the Fed will keep monetary policy tight for a longer period of time.
The Malaysian ringit and the Indonesian rupiah depreciated 0.6 percent and 0.5 percent, respectively, each hitting their lowest levels in a month, while the Philippine peso slid 0.6 percent.
Central banks around the world have decided to slow down the aggressive pace of rate hikes as multiple sets of data pointed towards a cooling inflation. However, the expected uptick in the upcoming US CPI data has cemented bets that the Fed would keep monetary policy tight for longer.
In its February 16 policy meeting, the Bangko Sentral ng Pilipinas (BSP) is expected to hike rates by 50 basis points (bps), said Vishnu Varathan, economics and strategy head at Mizuho Bank.
“Even though monetary policy works with a lag, BSP is not afforded the luxury of taking a step back on rate hikes given elevated and more worryingly rising, price pressures.”
Bank Indonesia is also meeting later this week and the rupiah might benefit more from an open, data-dependent path than closing of all avenues for further rate hikes, Varathan added.
Claire Alviar, analyst at Philstocks Financial Inc., said investors opted to sell some of their positions as they await the meeting of the BSP while looking forward to the release of the US’ inflation figure for January, which could influence the decision of the Federal Reserve on interest rates.
“Back at home, the strong demand in January raises the possibility the BSP will hike interest rates by 50 bps but some are still seeing the BSP hiking by 25 bps only despite the higher-than-expected inflation in January,” Alviar said.
Most actively traded BDO Unibank Inc. was up P0.90 to P126.40. Metro Pacific Investments Corp. was up P0.18 to P4.40. GT Capital Holdings Inc. was up P20 to P550. GT Capital Holdings Inc. was up P20 to P550. SM Investments Corp. was down P5 to P895.
Metropolitan Bank and Trust Co. was up P0.05 to P61.40. Manila Electric Co. was down P7 to P308. Globe Telecom Inc. was down P16 to P2,000. PLDT Inc. was down P54 to P1,326.
SM Prime Holdings Inc. was up P0.10 to P37.70. Ayala Corp. was down P20 to P680.
