The local stocks and the peso headed to different directions at the start of what could be another rocky week for global markets, thanks to lingering uncertainty about the banking sector.
The PSE index, the 30-company benchmark of the Philippine Stock Exchange, lost 7 points, or 0.11 percent, to close at 6,595.03, as two of the six subsectors retreated.
The broader all-share index went down 2 points, or 0.08 percent, to settle at 3,514.07, on a value turnover of P3.63 billion. Losers edged gainers, 87 to 82, while 46 issues were unchanged.
Only three of the 10 most active stocks ended in the green, led by SM Investments Corp. which rose 1.44 percent to P918.00. ACEN Corp. gained 0.78 percent to P6.47, while Bank of the Philippine Islands added 0.49 percent to finish at P102.00.
Meanwhile, the peso sustained its strength this year, as it closed at 54.29 against the US dollar Monday, up from 54.35 on Friday. It was also up 2.63 percent against the greenback since the start of this year’s trading.
Asian stocks were mixed Monday, while European stocks were mostly up at the open, with troubled Deutsche Bank surging 4.5 percent after its shares nosedived on Friday. London and Paris also climbed.
Hong Kong and Shanghai dipped, while Tokyo, Sydney and Singapore rose following a positive finish on Wall Street last week.
The US Federal Deposit Insurance Corporation announced during Asian trade that First Citizens had agreed to buy Silicon Valley Bank, whose collapse this month had sparked fears of a global contagion in the banking sector.
Deutsche Bank had returned to financial health last year following a major restructuring after years of problems.
But concerns about its current state roiled markets last week, prompting US President Joe Biden, German Chancellor Olaf Scholz and other European officials to try and calm investors about the banking sector.
Clifford Bennett, chief economist at ACY Securities, said Monday it was unlikely the German government would allow Deutsche Bank to collapse or face restructuring.
But it showed “the continuing and growing pressure on the banking system among the major Western economies”, he wrote in a note.
“No bank is immune in the current climate. The forces that lead to the crisis so far seen, of higher rates and depositor uncertainty, only continue to grow.”
Markets had rallied last week after financial authorities acted to prevent contagion from the collapse of US regional lenders this month.
But sentiment soured following decisions by central banks in the United States, Britain and Switzerland to hike interest rates, despite concerns about the impact of the monetary tightening on banks.
Amir Anvarzadeh of Asymmetric Advisors said markets would “remain in a state of flux as concerns about the health of the global banking system persist”.
At the same time, “the market seems to have come to the view that the latest banking turmoil will do much of the work in taming inflation and chances for easier monetary policy this year have dramatically increased,” he said. With AFP