MANILA – Profit-taking reigned in the local equities market on Monday after it affected the foreign exchange market partly on increased yield of 10-year US Treasury bonds.
After a recovery last Friday, the Philippine Stock Exchange index (PSEi) shed 1.68 percent, or 116.07 points, to 6,810.34 points.
Rizal Commercial Banking Corporation (RCBC) chief economist Michael Ricafort also attributed the decline to foreign selling.
All Shares followed with a drop of 1.04 percent, or 43.77 points, to 4,155.23 points.
Most of the sectoral gauges also finished the trade in the negative territory, led by the Holding Firms which fell by 2.65 percent.
Services index slipped by 1.47 percent, Industrial by 0.90 percent, Property by 0.86 percent, and Financials by 0.72 percent.
Only the Mining and Oil index gained during the day after it rose by 4.34 percent.
Volume totaled 16.43 billion shares amounting to PHP8.5 billion.
Losers led gainers at 116 to 96, while 44 shares were unchanged.
Meanwhile, the peso weakened for the fourth consecutive day to 48.7 from 48.45 last Friday.
It opened the day at 48.44 and traded between 48.7 and 48.43.
Average level for the day stood at 48.562.
Volume totaled USD1.29 billion, higher than the USD726.62 million in the previous session.
In a reply to e-mailed questions from PNA, Ricafort said the peso closed at its weakest in more than six months, or since Aug. 17, 2020 when it closed the trade at 48.71.
He said 10-year US Treasury bond yield registered “new highs in nearly a year at 1.39 percent levels that increased the interest rate differentials in favor of the US dollar and also partly caused the healthy profit-taking in the stock markets locally and in the US/globally.”
Ricafort said the rise of oil prices to a 13-month high in the international market, along with upticks in other major global commodities to seven to eight-year highs, are also among the factors in the local currency’s weakness during the day since these “could lead to higher import bills for the country.”
He said “emergency use authorization on Sinovac already approved by local FDA (Food and Drug Administration) as well as the arrival of more Covid-19 doses could help recovery prospects for the overall economy as well some pick up on imports.”
With these factors, Ricafort forecasts the peso’s next resistance levels between 48.70 and 48.80. (PNA)
