THE peso continued to fall on Tuesday and the stock market retreated slightly from an over four-year high, with sentiment said to have weakened due to fears of a wider war in the Middle East and the reduced likelihood of another jumbo US Federal Reserve rate cut.
The currency shed 8 centavos to close at P56.905 against the dollar, while the benchmark Philippine Stock Exchange index shed 17.43 points, or 0.23 percent, and ended the day at 7,537.25.
The broader All Shares lost 5.56 points, or 0.14 percent, to 4,077.41.
These mirrored results elsewhere in the region. Most emerging Asian currencies were subdued and equities traded mixed as the escalating conflict in the Middle East and a repricing of Fed rate cut bets drove investors to the safe-haven dollar.
Rising Brent crude prices due to the conflict in the Middle East also kept currencies of net oil importers from emerging Asia under check.
The peso opened at P56.8:$1 and ranged from P56.72 to P56.98. Volume reached P1.897 billion, down from P1.296 billion on Monday.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the dollar had gained against major global currencies.
Philstocks Financial Inc. research manager Japhet Tantiangco, meanwhile, said “the local market pulled back this Tuesday as investors took profits after a two-day rally.”
“The negative cues from Wall Street driven by the rise in Treasury yields, and the weakening of the local currency also weighed on the bourse,” he added.
Tantiangco noted that trading remained active with net value turnover at P5.87 billion, higher than the year-to-date average of P5.22 billion.
“Foreigners were still net buyers with net inflows amounting to P428.08 million,” he added.
Regina Capital Development Corp. Managing Director Luis Limlingan, for his part, said “Philippine shares slipped as investors faced headwinds with rising oil prices and elevated treasury yields dampened market sentiment.”
“Investors are keeping a close eye on key economic data this week, with the Fed meeting minutes due on Wednesday and the CPI (consumer price index) report scheduled for Thursday,” he added.
“US stocks faced challenges … as the benchmark 10-year Treasury yield exceeded 4 percent for the first time since August, reaching 4.02 percent,” he continued.
Back home, all but two sector indices closed in the red, with property down the most by 2.48 percent. Services and financials rose by 0.86 percent and 0.72 percent, respectively.
Gainers outnumbered decliners, 109 against 97, while 54 stocks were unchanged.
WITH A REPORT FROM REUTERS
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