Peso further gains but profit-taking hits PSEi
THE peso gained for the third straight day against the dollar on Wednesday, but profit-taking saw the stock market fall back to the 6,400 level.
The currency strengthened by 12 centavos to P58.32 against the dollar, its best close in over a month, while the benchmark Philippine Stock Exchange index (PSEi) shed 67.31 points, or 1.03 percent, to end the day at 6,489.35.
The broader All Shares index also fell by 28.20 points, or 0.80 percent, to 3,510.04.
The peso opened trading at P58.48:$1 and ranged from P58.3 to P58.5. Volume reached P1.161 billion, slightly lower than the P1.184 billion recorded in the previous session.
Michael Ricafort, chief economist at Rizal Commercial Banking Corp., noted that the peso strengthened amid an easing in local bond yields after the Bangko Sentral ng Pilipinas (BSP) chief reiterated that a rate cut could come in August.
«The peso also became stronger recently after global crude oil prices again corrected lower,» he added.
Philstocks Financials Inc. research associate Claire Alviar, meanwhile, said «the local bourse dropped due to profit-taking after two consecutive days of market rally.»
Advertisement«Foreign investors also pulled the market down as it registered net selling of P202.79 million,» she added.
«Although the BSP's rate cut in August was highly anticipated by investors, the possibility that the rate cut may lead to further weakness of the peso to below P59 against the US dollar negatively affected sentiment.»
Regina Capital Development Corp. Managing Director Luis Limlingan said «Philippine shares took a breather, slipping below the 6,500 level following Wall Street's mixed results ...»
«The S&P 500 edged up 0.07 percent, and the Nasdaq added 0.14 percent, while the Dow dipped 0.13 percent,» he noted.
AdvertisementLimlingan also pointed out that US Federal Reserve (Fed) Chairman Jerome Powell had warned that prolonged high rates could hinder growth, and that BSP Governor Eli Remolona Jr. also highlighted the economic risks of delaying interest rate cuts.
All sector indices closed the day in the red with the industrials down the most by 1.64 percent.
Decliners outnumbered gainers, 111 to 62, while 62 were unchanged.
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