The peso and the stock market sank to fresh lows Monday as traders track developments in the Ukraine war and diplomatic efforts to bring the crisis to an end.
The Philippine Stock Exchange plunged 295.24 points, or 4.2 percent, to a six-and-a-half month low of 6,816.95 on a value turnover of P8.9 billion, while the peso depreciated against the US dollar to its weakest level in two and a half years.
Stock market losers overwhelmed gainers, 190 to 34, with 28 issues unchanged.
Major property developer Ayala Land Inc. of the Ayala Group dropped 7.6 percent to P34.05, while parent Ayala Corp. lost 5.1 percent at P759.50.
PLDT Inc., the biggest telecommunications firm, fell 6.3 percent to P1,715, while International Container Terminal Services Inc., the largest port operator and owned by tycoon Enrique Razon Jr., declined 6.2 percent to P212.
The peso closed at 52.475 per greenback, weaker than the 52.29 Friday. It was its weakest level since the 52.545 on Aug. 15, 2019. Total volume turnover hit $806.55 million, down from $1.099 billion previously.
Michael Ricafort, chief economist of Rizal Commercial Banking Corp., earlier attributed the peso’s downward trajectory to the latest imports and trade deficit data, which were among the record highs on a monthly basis.
The rest of Asian markets mostly fell Monday while Hong Kong took a pounding after China placed Shenzhen into lockdown, fueling a rout in the tech sector.
Oil prices dropped, providing some respite after they soared to a near 14-year high last week, though the commodity remains elevated around $110 and keeping upward pressure on inflation.
Trading floors continue to be awash with uncertainty as Russia’s war in Ukraine rages, with comments from Vladimir Putin that there were “positive developments” in talks with Kyiv unable to provide much support.
After another drop on Wall Street, Asia struggled.
Hong Kong tanked five percent and the Hang Seng Tech Index was slammed around 11 percent with market heavyweights Alibaba and Tencent also each losing around a tenth of their value.
Shanghai, Seoul, Singapore, Taipei, Bangkok and Wellington also fell, though Tokyo, Sydney, Mumbai and Jakarta rose.
US National Security Adviser Jake Sullivan is due to meet senior Chinese diplomat Yang Jiechi in Rome later Monday, with Ukraine top of the agenda as the White House seeks help in bringing the crisis to a swift conclusion.
Beijing has declined to directly condemn Moscow for launching its invasion, and has repeatedly blamed NATO’s “eastward expansion” for worsening tensions between Russia and Ukraine, echoing the Kremlin’s prime security grievance.
Investors are also nervously awaiting the Fed’s latest monetary policy gathering, which is expected to end Wednesday with the bank announcing a quarter-point interest rate hike.
The US central bank is trying to walk a fine line between trying to rein in runaway inflation while also trying to support the world’s biggest economy in the face of the war in Ukraine, which many fear could lead to another recession.
“We are experiencing extraordinary volatility in global equities compounded by wavering market sentiment, and the risk of recession intensifies on spiraling commodity prices,” Louise Dudley at Federated Hermes said. With Julito G. Rada, AFP