Stocks slide on Fed rate fears, peso hits record low


SHARES fell on Monday amid continued fears of aggressive US Federal Reserve rate hikes and after the peso hit a new record low against the dollar.

The Philippine Stock Exchange (PSEi) benchmark index fell 16.61 points, or 0.24%, to close at 6,676.04 on Monday. Meanwhile, the broader All-Shares Index declined 6.82 points, or 0.19%, to 3,541.71.

“Philippine stocks fell without any indication as Wall Street has a four-day trading week this week observing the Labor Day holiday on Monday,” Luis A. Limlingan, director of sales at Regina Capital Development Corp., said in a Viber message.

“There was also some overhang as the US sold lower on Friday amid fears the Fed would aggressively hike rates to fight inflation,” Mr Limlingan said.

Claire T. Alviar, research analyst at Philstocks Financial, Inc., said in a Viber message that PSEi fell “as investors digest the peso’s depreciation to a record low and the rise in government debt to a record high.”

“So far the peso remains at P56 levels, but it is now attempting to breach the P57 level amid the Federal Reserve’s aggressive stance. Meanwhile, some investors stood on the sidelines…while investors await August’s in releasebottleration rate,” Ms Alviar added.

The peso closed at 56.77 pesos per dollar on Friday, surpassing a record low of 56.45 pesos set in 2004.

On Monday, after market close, the local unit ficlosed at a new all-time low of P56.999 against the greenback, with the peso touching the P57 per dollar level on the day.

Meanwhile, national government debt rose 0.8% to a record 12.89 trillion pesos in late July, on the back of additional domestic and local borrowing and the weaker peso.

On the other hand, A business world Survey of 13 analysts gave a median estimate of 6.4% for August inbottleation, within the central bank’s 5.9-6.7% forecast.

If realized, August inflation would be flat from July’s 6.4% print, which is the highest in 45 months or since October 2018’s 6.9% print.

The Philippine Statistics Agency is expected to release the latest inflation data on September 6, Tuesday.

The majority of sector indices closed lower on Monday except fiFinancials were up 17.90 points, or 1.11%, to 1,630.07 and services were up 1.66 points, or 0.09%, to 1,693.69.

Meanwhile, the property value fell 21.84 points, or 0.73%, to 2,963.12; Mining & Oil declined 83.96 points, or 0.72%, to 11,559.85; Holding companies declined 37.40 points, or 0.57%, to 6,421.11; and Industrials slipped 27.46 points, or 0.27%, to close at 9,898.94.

Value turnover fell to P4.19 billion on Monday, with 822.65 million shares changing hands, from P4.59 billion with 1.02 billion issues on Friday.

Net foreign purchases fell to P61.43 million on Monday from P82.78 million on Friday. — JID table

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