Manila: The Philippine Stock Exchange index (PSEi) reversed course on Tuesday as investors maintained a wait-and-see stance amid local economic concerns and geopolitical developments, while the peso weakened against the U.S. dollar. The local bourse's main index fell by 0.77 percent to 5,963.24 points, while the broader All Shares index declined by 0.53 percent to 3,353.94 points.
According to Philippines News Agency, three of the sectoral indices ended in positive territory, led by Mining and Oil, up 1.42 percent; Holding Firms, up 0.86 percent; and Financials, up 0.23 percent. Meanwhile, Services dropped by 2.72 percent, Property by 0.70 percent and Industrial by 0.61 percent. Trading volume remained thin at 734.52 million shares valued at PHP5.1 billion. Decliners outnumbered advancers, 117 to 77, while 53 shares were unchanged.
Luis Limlingan, head of sales at Regina Capital Development Corporation, noted that the Philippine market closed lower even as crude prices eased, with investors maintaining a cautious stance. He explained that sentiment was weighed down by local uncertainties, particularly fears that inflation could climb beyond 8 percent, fueling speculation of an unusually large 50bps (basis points) rate hike by the BSP (Bangko Sentral ng Pilipinas). These concerns reduced the appeal of equities and prompted a shift toward a risk-off posture.
Expectations of a possible rate hike were partly driven by elevated oil prices and anticipated increases in other commodities amid concerns that the Middle East crisis could further disrupt global oil prices and supply chains. Meanwhile, the local currency closed at 61.56 against the U.S. dollar, weaker than Monday's finish of 61.46. The peso opened trading at 61.45, depreciating from the previous session's opening level of 61.35, and traded between 61.40 and 61.65 during the day, bringing the average exchange rate to 61.58. Trading volume in the foreign exchange market declined to USD1.67 billion from the previous day's USD1.8 billion.
