The Philippine Stock Exchange index (PSEi) fell to a 6.5-month low on Monday, Jan. 13, dragged down by a strengthening US dollar and growing concerns over the pace of US Federal Reserve rate cuts.
The main index plunged by 153.22 points or 2.36 percent to close at 6,343.10 as Conglomerates led the retreat across the board. A total of 807 million shares worth P4.96 billion changed hands as losers trounced gainers 123 to 68 with 51 unchanged.
“Philippines share slid below the 6,400 level as the sentiment was pulled down from the Friday night performance of the US, which saw it's economy's latest employment figures crush estimates,” said Regina Capital Development Corporation Managing Director Luis Limlingan.
Philstocks Financial Research Manager Japhet Tantiangco said "The local market plunged as it took into consideration the rising inflation expectations in the US together with the possibility of the Federal Reserve slowing down with their policy easing.
"This comes following the US’ strong December 2024 labor market data. The Peso’s decline against the US Dollar also added to the pessimism."
Michael Ricafort, chief economist at Rizal Commercial Banking Corp (RCBC) said Monday's finish was lowest level since June 27, 2024.
"The PSEi declined for the second straight day, down for the fourth day in five days... after the US dollar continued to go up vs. major global currencies to new two-year highs," Ricafort said.
He added that the stronger dollar was fueled by better-than-expected US jobs data and higher-than-expected US consumer inflation expectations, which could reduce the urgency for future Fed rate cuts.
For the rest of the week, Limlingan said the key economic data to watch includes the US December Consumer Price Index (CPI), set for release on Wednesday morning.
Ahead of that, investors will analyze the December Producer Price Index (PPI) report, scheduled for Tuesday.
Additionally, market participants are keenly anticipating remarks from Kansas City Fed President Jeffrey Schmid and New York Fed President John Williams, both speaking on Tuesday.
On the local front, the only major data release this week is the November cash remittances report, which is due on Jan. 15.
Looking ahead, Ricafort identified key support levels for the PSEi at 6,300 and 6,158.48, while minor resistance is seen at the 6,635-6,820 range.