Local markets weighed down by geopolitical tensions abroad
June 16, 2019 - Sunday 7:06 PM by PNA
MANILA -- Geopolitical issues overseas heightened investors' risk aversion mood, resulting in a retreat by the Philippine Stock Exchange index (PSEi) and the weakening of the peso as trading for the week came to an end.
PSEi ended its four-day rally after it fell 0.77 percent, or 61.56 points, to 7,990.20 points.
BPI Research, in a market report, attributed the drop of the main equities index to tensions in the Middle East.
Reports said two oil tankers in the Gulf of Oman were attacked Thursday, which, in turn, resulted in the rise of global oil prices.
“Tension between the US and Iran escalated after the former blamed the latter for the attack,” it said.
Another factor for the slide in PSEi is the expectation of a cut in the Federal Reserve’s key policy rates in the near term due to weakness in the labor market, the report said.
With these factors, All Shares also finished the week’s trade on the red after it fell 0.59 percent, or 29.21 points, to 4,884.91 points.
Most of the sectoral counters also finished on the red, led by the Holding Firms, which declined 1.41 percent. It was followed by the Property, 0.85 percent; Industrial, 0.55 percent; and Services, 0.15 percent.
Volume was thin at 920.04 million shares amounting to PHP7.7 billion.
Losers led gainers at 112 to 74 while 54 shares were unchanged.
Also, Regina Capital Managing Director Luis Limlingan also cited the geopolitical concerns overseas as a big factor for the day’s trading.
“With little in the way of market-moving news, investors were searching for narratives and again weighing the potential impact of the U.S.-China trade war on policy and markets,” he added.
Relatively, the peso ended the week at 52.02 from 51.865 to a greenback Thursday, which BPI Research also attributed to the geopolitical tensions abroad.
It opened the trade at 51.9, sideways from the previous session’s 51.95 start.
It strengthened to 51.845 but also dipped to 52.025. Average level for the day stood at 51.914.
Volume amounted to USD870.39 million, lower than the USD919.84 million a day ago.
The currency pair is seen to trade between 51.80 and 52.20 Monday next week.
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