Manila: The local bourse ended lower Friday, while the peso weakened to a one-month low of 59.00 against the U.S. dollar. After rebounding on Thursday, the Philippine Stock Exchange index (PSEi) fell 0.94 percent to 6,320.41 points. The broader All Shares index also declined 0.88 percent to 3,494.99 points.
According to Philippines News Agency, most sectoral indices dropped, led by Mining and Oil, which fell by 2.21 percent. Financials dropped by 2.14 percent, followed by Services at 1.05 percent, Holding Firms at 0.71 percent, and Industrial at 0.16 percent. The only sector that saw an increase was the Property index, which gained 0.28 percent.
Total volume reached 1.66 billion shares worth PHP7.66 billion, with decliners outnumbering advancers, 116 to 69, while 62 shares remained unchanged. 'Philippine market declined by nearly 1 percent as investors remained cautious amid the ongoing conflict in the Middle East, which continues to weigh on global sentiment and heighten uncertainty,' said Luis Limlingan, head of sales at Regina Capital Development Corporation.
Limlingan also noted the weakening of the local currency to the 59-level as an additional factor, stating that this performance 'further dampened investor confidence and pressured equities across key sectors.' The local currency depreciated throughout the week, closing on Friday at 59.00 to a U.S. dollar from its 58.63 close on Thursday. It opened the day at 58.68, weaker than the previous 58.4, and traded between 58.65 and 59.00, bringing the day's average to 58.91. Volume rose to USD1.85 billion from USD1.57 billion a day ago.
Rizal Commercial Banking Corporation chief economist Michael Ricafort attributed the peso's weakness partly to Bangko Sentral ng Pilipinas (BSP) Governor Eli Remolona's statement about a possible policy rate cut if global crude oil prices exceed USD100 per barrel due to the Middle East conflict. Remolona mentioned that further BSP rate cuts might be necessary to help stabilize inflation, which is expected to rise above 3 percent this year, still within the central bank's 2-4 percent target range.
