Profit-taking, BSP jitters drag market, peso

The Philippine Stock Exchange Index (PSEi) closed at 6,114.81 on Wednesday, down 131.0 points, or 2.10 percent, while the peso snapped its recent winning streak, weakening by 7 centavos to close at P60.39 per US dollar.

Investors locked in profits following the market’s sharp rally on Monday after the announcement of a potential peace agreement between the United States and Iran.

Cautious

Market participants also adopted a cautious stance ahead of the Bangko Sentral ng Pilipinas’ (BSP) policy meeting, with expectations of at least a 25-basis-point rate hike amid lingering concerns over elevated inflation despite the anticipated resolution of the Gulf conflict.

Despite the selloff, trading activity remained relatively robust, with value turnover reaching P7.41 billion. Foreign investors turned net sellers, posting net outflows of P127.54 million.

Sector performance reflected the market’s defensive tone. Financials was the lone sector to finish in positive territory, rising 1.37 percent on continued strength in major banking stocks. All other sectors ended lower, led by Services, which fell 4.59 percent, largely due to weakness in International Container Terminal Services Inc., the session’s biggest laggard, which declined 6.25 percent to P900 per share.

Peso weakened slightly

Meanwhile, the peso weakened slightly against the US dollar. Data from the Bankers Association of the Philippines (BAP) showed the currency closing at P60.39 per dollar, compared with P60.32 in the previous session, representing a depreciation of 7 centavos, or about 0.12 percent.

The peso traded within a range of P60.23 to P60.44 during the session, while the BAP weighted average settled at P60.328, compared with P60.384 on 16 June.

The currency’s modest retreat followed several sessions of gains and was broadly consistent with a stabilization in the US dollar ahead of key central bank meetings and a mild return to safe-haven demand.

Upcoming monetary

policy decisions

Global markets have become increasingly focused on upcoming monetary policy decisions and renewed geopolitical uncertainty. Investors pared risk positions ahead of the BSP meeting and other major central bank announcements, supporting demand for the US dollar.