pesos, falling stock market; heightened concern cited

The peso fell again and the stock market fell below 6700 as fears about higher interest rates and geopolitical events intensified.

The currency weakened nine and a half centavos to 55.18 pesos against the dollar, while the Philippine Stock Exchange’s benchmark index (PSEi) fell 101.73 points, or 1.50 percent, to close at 6699.23.

The broader All Shares Index also fell sharply, dropping 42.25 points, or 1.17 percent, to 3579.36.

“Investors were concerned about the possible continuation of interest rate hikes by the Fed (US Federal Reserve), as well as Bangko Sentral ng Pilipinas, which could slow down the growth of most industries,” notes Philstocks Financial Inc. said researcher Claire Alviar.

Meanwhile, China Bank Securities head of research Rustin Mercado said the PSEi ignored “positive news of the Senate’s ratification of the Comprehensive Regional Economic Partnership Agreement” as it monitored offshore market weakness with the prospect of higher interest rates.

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He added that market weakness on Wednesday could continue until today and test the 6600-6640 support levels.

“A successful test of this support node could lead to more aggressive trade hunting, paving the way for a recovery, possibly to the 6900 resistance level,” Mercado continued.

Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said lingering geopolitical risks weighed on sentiment as Russian President Vladimir Putin suspended his country’s participation in a nuclear weapons pact with the United States.

“US President Biden responded to Putin by saying that he would never win the war in Ukraine. Moreover, Biden also promised to increase aid to Ukraine,” Ricafort added.

“The US has also warned that it will not hesitate to impose sanctions on Chinese companies that support Putin’s invasion.”

The peso opened at 55.07 pesos: $1 and fluctuated between 55.05 and 55.24 pesos. Volume reached $1.006 trillion, down from $1.034 trillion in the previous session.

In the stock market, all sectoral indices closed in the red, real estate fell the most by 1.84%.

A total of 1.34 billion shares were sold, worth 4.93 billion pesos.

There were more declines than rises, from 134 to 45, while 43 remained unchanged.

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