MANILA – Reports about the continued rise of coronavirus disease 2019 (Covid-19) cases in the Philippines alone and another emergency rate cut by the Federal Reserve resulted in the negative close of both the peso and the main stock index Monday.
The peso ended the week’s first trading day at 51.5 to a US dollar from its 51.03 close last Friday, a day after Metro Manila was placed under community quarantine to prevent further rise in Covid-19 cases.
The Fed on Sunday also announced a 100-basis reduction in the Fed funds rate to 0.25 percent effective Monday this week from 1.75 percent.
This is the second cut for the month after the 50-basis-point reduction in an unscheduled meeting last March 3. Both decisions aim to address the impact of the Covid-19 pandemic on the US economy and its subsequent effect on the global economy.
For the day, the peso opened flat at 51.25 and traded between 51.5 and 50.99. Average level for the day stood at 51.174.
Volume amounted to USD769.39 million, nearly half the USD1.42 billion in the previous session.
BDO chief strategist Jonathan Ravelas, in a reply to queries from the Philippine News Agency, forecasts the peso to trade between 51.25 to 51.70 against the greenback on Tuesday.
The Philippine Stock Exchange index (PSEi) shed 7.92 percent, or 458.57 points, to 5,335.37 points.
All Shares declined by 6.35 percent, or 221.85 points, to 3,271.79 points.
Holding Firms posted the highest drop among the sectoral gauges with 10.02 percent, and was trailed by the Financials, 8.93 percent; Property, 7.78 percent; Mining and Oil, 4.32 percent; Industrial, 2.49 percent; and Services, 2.20 percent.
Volume totaled to 618.19 million shares amounting to PHP6.44 billion.
Decliners surpassed advancers at 145 to 46, while 40 shares were unchanged.
“Just like what we saw today, the markets could still fall ‘til we see some light at the end of the tunnel,” Ravelas said, referring to falling infection cases and additional fiscal spending.
Regina Capital Managing Director Luis Limlingan said it is “hard to say” when the local bourse can take a breather given the current health situation in the country.
“Obviously, if cases do not climb, then, business can resume normal operations asap (as soon as possible),” he said.
Starting March 17, foreign exchange trading hours will be shortened from 9 a.m. to 3 p.m. to 9 a.m. to 12 noon following the community quarantine declaration for Metro Manila beginning Sunday.
Meanwhile, Malacanang on Monday announced a decision to place the whole Luzon under an enhanced community quarantine to control Covid-19 outbreak.
To date, the government reported 140 confirmed Covid-19 cases, with 12 deaths. (PNA)
