PHILIPPINE financial markets got off to a bad start on Monday as peso reversed from a gain last Friday and the benchmark Philippine Stock Exchange index fell to its lowest in nearly seven months.
The currency weakened by 34 centavos to P58.7 against the dollar while the PSEi shed 153.22 points, or 2.36 percent, to close the day at 6.343.10 — the lowest since June 25, 2024’s 6,299.05.
The broader All Shares dropped 49.94 points, or 1.33 percent, to 3,704.91.
The peso opened at P58.525:$1 and ranged from P58.5 to P58.7. Volume hit P1.354 billion, down from theP1.815 billion recorded last Friday.
Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso weakened as the dollar gained against major global currencies.
The greenback rose after stronger than expected jobs data underscored the strength of the US economy and lowered expectations of Federal Reserve rate cuts this year.
Philstocks Financial Inc. research manager Japhet Tantiangco, meanwhile, said “the local market plunged as it took into consideration the rising inflation expectations in the US together with the possibility of the Federal Reserve slowing down with their policy easing.”
“This comes following the US’ strong December 2024 labor market data,” he added.
“The peso’s decline against the US dollar also added to the pessimism.”
Trading for the day was described as “tepid” with net value turnover at P4.43 billion, and Tantiangco added that “foreigners were net sellers with net outflows at P696.26 million.”
Regina Capital Development Corp. Managing Director Luis Limlingan, meanwhile, said “Philippines shares slid below the 6,400 level as the sentiment was pulled down from the Friday night performance of the US, which saw its economy’s latest employment figures crush estimates.”
“On the local front, the only major data release this week is the November cash remittances report, which is due on Jan. 15,” he noted.
DragonFi Securities, Inc. equity research analyst Jarrod Tin said “the market faced heavy selling pressure due to multiple factors.”
“First, weak investor sentiment emerged after last Friday’s strong US jobs data, which raised expectations for a slower pace of rate cuts,” he explained.
“Second, the rising 10-year US Treasury yield continued to weigh on risk assets like stocks,” he added.
“Third, potential fund flows ahead of the PSEI rebalancing next month added to the market’s cautious tone.”
The PSEi’s having fallen below the 6,400 support level also further discouraged investor confidence, Tin said.
All sector indices closed in the red,with holding firms down the most by 3.47 percent.
On a company basis, decliners outnumbered gainers, 123 to 68, while 51 were unchanged.
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