Middle East tensions hit peso, stocks

Philippine Stock Exchange (PSE) Building. PHOTO BY ENRIQUE AGCAOILI

THE peso fell for a fourth straight trading day on Monday, and the stock market also dropped to its lowest in nearly three months as sentiment was hit by tensions in the Middle East.

The currency weakened by nearly 28 centavos to P56.808 against the dollar while the benchmark Philippine Stock Exchange index (PSEi) shed 96.96 points, or 1.46 percent, to end the day at 6,562.43 — its lowest close since January 19’s 6,503.54.

The broader All Shares index also fell, by 39.29 points, or 1.12 percent, to 3,478.11.

The peso opened at the day’s low of P56.65:$1 and traded as high as P56.845. Volume reached P1.59 billion, higher than the P1.085 billion recorded in the previous session.

Rizal Commercial Banking Corp. chief economist Michael Ricafort said the peso further weakened as the dollar strengthened against major global currencies and worries over oil prices.

Philstocks Financial Inc. research associate Claire Alviar, meanwhile, said that heightened tensions in the Middle East prompted investors to “secure some gains to avoid uncertainties.”

“Most Asian markets also fell as investors assessed the impact of Iran’s massive drone and missile attacks on Israel over the weekend. Moreover, investors are waiting [to see] how Israel will respond to this,” she added.

Regina Capital Development Corp. Managing Director Luis Limlingan echoed this, saying traders had taken “precautionary measures” amid escalating tensions between Israel and Iran.

Market participation was strong, resulting in a net market value turnover of P5.21 billion.

Except for mining and oil, which gained by 0.33 percent, all other sector indices ended in red territory. Holding firms declined the most by 1.99 percent.

Decliners overwhelmed advancers, 136 versus 63, while 44 were unchanged.