Share prices dropped Wednesday, tracking overseas leads. The peso continued to post record lows.
The Philippine Stock Exchange index (PSEi) was down 155.52 points, a 2.32 percent drop to 6,554.08.
The broader all shares index was down 60.88 points or 1.71 percent to 3,490.07.
Losers edged gainers 115 to 59 with 50 stocks unchanged. Trading turnover reached P4.85 billion.
The peso closed at 57.135 to the dollar, down from 57 on Tuesday.
The currency opened at 57, an intraday high and hit a low of 57.33. Trading turnover reached $1.23 billion.
A buoyant US dollar and Treasury yields dragged Asian currencies into a sea of red on Wednesday as fears of the US Federal Reserve’s commitment to aggressively tighten monetary policy intensified further, Reuters reported.
The Malaysian ringgit fell 0.1 percent to hit its lowest level since the 1998 Asia financial crisis as investors shifted to safe havens amid uncertain global economic outlook.
“The strengthening of the greenback is broad-based against other currencies in the region as well due to the aggressive Fed and intervention by the Malaysian central bank may not be able to shore up the ringgit over an extended period,” said Imran Yusof, Director and Head of Amanah Investment Bank.
A resurgent greenback is weighing on the regional currencies after a report showed overnight that the US services industry unexpectedly picked up last month, reinforcing the view that the Federal Reserve will press ahead with large rate hikes to tame inflation.
“However, looking at improving growth momentum, elevated commodity prices, and increasing activities on the back of economic reopening, we believe the economic fundamentals are more in favour of stronger Ringgit,” he added.
Nicholas Mapa, a senior economist for the Philippines at ING was of the view that a widening trade deficit also contributed to the weakening of the peso.
“Given the strong dollar and high trade deficit, the peso can be under pressure for the rest of the year. The Bangko Sentral ng Pilipinas could make cursory appearances to help slow the depreciation trend but it will be difficult to stem the tide completely,” Mapa said.
Much like the peso and the ringgit, the Vietnamese dong fell 0.4 percent to its lowest since April 2020 while the Singapore dollar shed 0.2 percent to hit an over two-year low.
Emerging market currencies will find it difficult to reclaim ground lost this year as relentless Fed rate hikes and safe-haven demand keep the dollar ascendant, a Reuters poll of currency strategists found.
Luis Limlingan, managing director at Regina Capital and Development Corp., said the overnight drop in the US also took a toll on the local stock market.
“Last night’s (Tuesday) moves in the US came as investors tried to make a narrative on how tight the Fed’s tightening campaign would be given the strong eco data and surging bond yield. The 10-year US Treasury yield jumped to its highest level since June. The rate on the 30-year Treasury closed at its highest level since 2014,” he said.
Most actively traded AbaCore Capital Holdings Inc. was up P0.08 to P2.66. San Miguel Corp. was down P1 to P97. ACEN Corp. was down P0.27 to P7.03. Ayala Land Inc. was down P1.35. Jollibee Foods Corp. was down P3.20 to P36.15. SM Prime Holdings Inc. was steady at P36.15. BDO Unibank Inc. was down P3.80 to P124.20. International Container Terminal Services Inc. was down P0.40 to P181.60. PLDT Inc. was down P40 to P1,697. D&L Industries Inc. was down P0.14 to P7.69.
