Share prices decline; peso weakens
Philippine Daily Inquirer
Local stocks slipped Thursday, dragging the main index below the 6,800 level, as regional markets were spooked by a weak US economic data and growing tension in the Korean peninsula.
Also, the peso fell to the 41-to-a-dollar territory to close at its weakest level since the start of the year.
The main-share Philippine Stock Exchange index lost 31.58 points, or 0.46 percent, to close at 6,783.72.
Value turnover was thin at P6.71 billion. There were 71 advancers against 88 decliners, while 46 stocks were unchanged.
“Market is reflecting rising risk aversion,” said Banco de Oro Unibank chief strategist Jonathan Ravelas. If the next support level at 6,750 would give way, he said, this could extend the correction towards the 6,500 to 6,600 levels.
Investors sold down shares of ALI, MPI, MWC and BPI which all declined by over 1 percent. SM Prime, EDC, Bloomberry, AC, FGEN and RLC also contributed to the slump.
On the other hand, the PSEi’s decline was tempered by the modest gains of Belle, SMC, AEV and AP.
According to currency traders, reports that North Korea is trying to revive an old nuclear facility have spooked financial markets around the world.
The peso Thursday closed at 41.15 against the US dollar, down by 24.5 centavos from the previous day’s finish of 40.905:$1.
Intraday high reached 40.95:$1, while intraday low was 41.175:$1.
Amid eagerness of fund owners to shift to safer havens and away from emerging-market assets, volume of trade breached the $1-billion mark to reach $1.122 billion at the end of the trading day. The amount was up from the $920.2 million traded previously.
“The depreciation of the peso was due to flight to quality resulting from what is happening in North Korea,” Ravelas said. “Domestic factors are favorable, but these were not enough to counter the impact of external developments.” Doris C. Dumlao and Michelle V. Remo
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