MANILA -- Fears for another recession of the US economy made investors risk-averse, resulting in the weakening of the peso and the negative close of the Philippine Stock Exchange index (PSEi) on Thursday.
The local currency ended the day at 52.498 from the 52.28 close on Wednesday.
In its market report, BPI Research traced the weakening to reports that the German economy posted zero growth, as measured by gross domestic product (GDP), in the second quarter this year.
Other factors are the 17-year low industrial output of the Chinese economy last July, which grew 4.8 percent year-on-year, and the weaker-than-expected retail sales growth of 7.6 percent last July.
The report said these data affected investors’ sentiment, resulting in brief decline of the 10-year US Treasury yields lower than the two-year securities for the first time since 2007.
“The peso depreciated as a potential U.S. recession pushed investors towards risk aversion,” it said.
With concerns on the global economy further rising, the peso opened the day at 52.35 from the previous day’s 52.1.
It traded between 52.35 and 52.62, bringing the day’s average to 52.519.
Volume reached USD1.66 billion, up from the previous day’s USD1.27 billion.
The currency pair is seen to trade between 52.35 and 52.60 on Friday.
Meanwhile, the main equities index shed 0.38 percent, or 29.79 points, to 7,828.86 points.
All Shares contracted by 0.47 percent, or 22.57 points, to 4,746.35 points.
Almost all the sectoral indices also ended in the red, except the Holding Firm, which rose 0.63 percent.
Mining and Oil posted the biggest decline with 1.92 percent, followed by the Services, 1.23 percent; Financials, 1.13 percent; Property, 1.11 percent; and Industrial, 0.64 percent.
Volume reached 788.997 million shares amounting to PHP11.8 billion.
Losers led gainers at 149 to 54, while 42 shares were unchanged. (PNA)
