The Philippine stock market opened the week in negative territory on Monday as investors weighed the impact of a depreciating peso and surging crude oil prices on inflation and interest rate expectations.
The benchmark Philippine Stock Exchange Index (PSEi) dropped 0.71 percent, or 42.34 points, to close at 5,901.15.
Luis Limlingan, head of sales at Regina Capital Development Corp., attributed the decline to cautious sentiment fueled by the peso's continued weakness and renewed increases in global oil prices. "These developments fueled concerns over rising inflationary pressures, prompting fears of possible additional rate hikes by the central bank," Limlingan said. "As a result, investors stayed on the sidelines, weighing macroeconomic risks against near-term growth prospects."
Philstocks Financial research manager Japhet Tantiangco added that fading hopes for a US-Iran deal further weighed on sentiment.
Trading activity was subdued, with net value turnover falling to P4.65 billion from P5.23 billion on the previous trading day. Foreign investors continued to pull out funds, recording net outflows of P677.34 million.
Sectoral performance was mixed. Mining and oil stocks led gainers, rising 1.96 percent, while conglomerates posted the steepest decline, losing 1.74 percent. Market breadth was negative, with decliners outpacing advancers 107 to 86.
Among index members, Manila Electric Co. was the top gainer, climbing 2.18 percent to P655. DigiPlus Interactive Corp. was the biggest laggard, dropping 4.58 percent to P14.18.
Ron Acoba, chief investment strategist at Trading Edge, warned that the weakness could persist over the next one to two quarters, given the recent interest rate hike by the Bangko Sentral ng Pilipinas.